Dramatic Turn in Mortgage Rates
The Freddie Mac's Primary Mortgage Market Survey released last week, showed that both the long term and short-term conventional mortgage interest rates are going to suffer huge downward turns. This was forecasted before Tuesday when Federal Reserve made half point rate cut. Though there is no direct relationship between the Federal Reserve's twisted rates and the treasury rates that determine mortgage interest rate, but still there is dexterity between both the rates. In the survey by Freddie Mac and Mortgage Bankers Association, it is predicted that the interest rate during the coming week is on the verge of fall again. Freddie Mac mentioned that in the previous week the 30-year fixed rate mortgage averaged 6.31 percent with an average of 0.
5 points. This was 15 basis points lesser than the average of the week before that, when both the fees and points were at an average of 0.5 point. After the week ended in May 17 when the interest rate averaged 6.21 percent along with 0.
4 point, this was the lowest rate. During the last year at this point of time the interest rate of 30 year fixed mortgage was 6.43 percent. The average interest rate of 15 year Fixed Rate Mortgage fell down from 6.15 percent with 0.6 point to 5.97 percent with 0. Again this is the second lowest interest rate after May 17 when the average rate was 5.92 percent.
During the year 2006, at this time the average rate was 6.11 percent. In case of Adjustable Rate Mortgages, during last week the one-year treasury indexed adjustable rate mortgage fell down 12 basis points from 5.74 percent average interest rate. But on the other hand the fees and points inclined from 0.6 to 0. It is believed that the drop of almost 0.15 percent in the interest rate of the 30-year fixed rate mortgage and 15 year fixed rate mortgage will give some liberty to the borrowers who are looking to refinance or purchase a home. Due to this turn down in the mortgage market all the average interest rates are lower than what it was during the same time of the previous year.
The recent borrowers who took a mortgage loan just before the week ended in September 14 are pretty unhappy and cursing their luck. In a Mortgage Banker Association's report, it is said that this week the rates have gone little high. For instance, the 30 year fixed rate mortgage has gone high from 6.25 percent last week to 6.29 percent this week. Similarly the 15 year fixed rate mortgage gone high from 5.90 percent last week to 5.99 percent this week. Mortgage activity witnessed a rise of 2.4 percent on the basis of seasonal adjustment from the previous shortened week due to the Labor Day Holiday.
The unadjusted rise was about 25.6 percent and was 12.8 percent higher compared to the same time in the year 2006. As a part of total mortgage activity, refinance mortgages rose up to 43.5 percent from 42.1 percent last week whereas the share of mortgage applications for adjustable rate mortgage once again dropped from 13.2 percent to 12.6 percent.