23 Aug 10 Home Mortgage Rates Fall to Record Lows Again
Freddie Mac said rates on 5/1 adjustable-rate mortgages, set at a fixed rate for five years and adjustable in each following year, was 3.56%, unchanged from last week, remaining at its lowest level since Freddie Mac began tracking this loan type in 2005.
Last year at this time, 15-year mortgages averaged 4.56 %; the one-year ARM was 4.69%, and the 5/1 ARM was 4.57%. Rock-bottom rates should continue to spur demand for home loan refinancing, putting extra cash into consumers’ hands that they can save, use to pay off existing debt or funnel into the economy through extra spending.
Home loan applications rose 13% in the week ended August 13th, fueled more by homeowners seeking a house refinance than by new buyers looking for loans, according to an index from the Mortgage Bankers Association. Record low interest rates have yet to spur home sales, which are being weighed down by unemployment and the end of a federally sponsored home-buyer tax credit.
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