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Mortgages: Yet More Good News for Borrowers

December 22nd, 2008

Freddie Mac unveiled yet more good mortgage news for borrowers on Friday in its weekly survey of average rates. The figure for a 30-year loan was 5.19 percent, which the Wall Street Journal says is the lowest since records began in 1971, 37 years ago. New 15-year mortgages were averaging 4.92 percent.

The Journal also pointed out that mortgages generally closely track long-term government notes, and that these are also continuing to decline. This means that there’s every reason to expect mortgage rates to continue their downward trend.

All of this positivity is translating into a much larger volume of mortgage applications. The Mortgage Bankers Association reports that these are up 37.3 percent up on the same week last year. However, refinancing represents 76.9 percent of all activity, which may not be quite such good news.

More on that soon.

Mortgage Opportunities from Record Rate Cut

December 16th, 2008

Late yesterday (Tuesday) afternoon, the Federal Reserve slashed its target for the overnight federal funds rate to a range of 0 to 0.25 percent. That may sound like meaningless gobbledygook, but it’s not. It’s an all-time record low. Read the rest of this entry »

Decreasing Mortgage Applications Highlight Homeowners’ Difficulties

February 27th, 2008

Mortgage applications dropped for the 3rd consecutive week according to the Mortgage Bankers Association’s weekly survey of applications. Mortgage applications dropped by 19.2% during the week ending February 22. Refinance applications declined by 30%, which appears to highlight the difficulties homeowners are experiencing due to falling home prices and tighter mortgage lending standards.

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Time May Be Running Out For Super-Low Mortgage Rates

February 21st, 2008

To take a step back from week-to-week news for a moment before moving on to recent developments, a little historical perspective reveals just how low mortgage rates are these days. For a month-and-a-half now, thirty-year mortgage rates have been below 6.0%. How low is that? In thirty-six years of mortgage data, there have only been three years in which mortgage rates averaged below 6.0%. In none of those three years, did those rates stay below 6.0% for the entire year.

In other words, history is clear on two things:

  • Current mortgage rates are low
  • Low mortgage rates don’t stay around for long

This history lesson gives added power to some recent developments:

It all adds up to reinforce the importance of taking advantage of low interest rates as soon as they become available.

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Wild Week for Mortgage News

January 31st, 2008

It was a wild week for mortgage news:

In the through-the-looking-glass world of interest rates, where bad economic news is often welcomed as a harbinger of lower rates, the consensus seemed to be rates would continue to fall. However, mortgage shoppers would be wise not to hold out for too long, because the story may not be as simple as all that.

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