17 Nov 09 Mortgage Rates Decline
Mortgage refinance rates moved down a bit last week. Freddie Mac announced that for the week ending November 5, thirty-year fixed rates averaged 4.98%, down from 5.03% the week before. In response to the rate reductions, FHA refinance activity rose slightly as homeowners made moves to lock in their mortgages to a fixed rate to maximize the affordability.
The average for fifteen-year fixed mortgage rates dropped to 4.40%. Adjustable rate mortgages were also lower with the average for one-year adjustable rates declining to 4.47% and five-year adjustable rates dropping to 4.35%. A year ago 30-year fixed rates were at 6.20%. “Rates fell back this week pulling interest rates on 30-year fixed loans under 5 percent,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Lower FHA mortgage rates should help homeowners reduce their monthly loan payments and feed the ongoing recovery in the housing sector.
The Federal Housing Finance Agency reported that Freddie Mac and Fannie Mae have financed more than 3.5 million refinance loans during the first nine months of 2009. Freddie Mac estimates that borrowers who redid their conventional loan during the third quarter reduced their rate by a median of 1.1 percentage points, which will save these borrowers an aggregate of $3 billion in payments over the next year.
