The Wall Street Journal reports that once again, mortgage rates have fallen, extending their record lows another week according to Freddie Mac’s weekly survey of mortgage rates.

The declines come as the Treasurys market has seen continued strength, pushing yields down. Mortgage rates, all of which have at least touched multi-year lows recently, generally track yields.

For the week ending July 8, a 30-year fixed-rate mortgage averaged 4.57%. The prior week averaged 4.58%. At this time last year, a 30-year fixed-rate mortgage averaged 5.2%. Freddie Mac has been tracking these rates for 39 years, and this is the lowest recorded rate in that history.

15-year fixed-rate mortagges were slightly up, averaging 4.07% as opposed to last week’s 4.04%. Last week’s rate was the lowest since Freddie Mac began tracking these rates in 1991, and down from last year’s 4.69% at this time.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.75%—the lowest level since Freddie started keeping score in 2005—down from 3.79% and 4.82%, respectively. One-year Treasury-indexed ARMs were 3.75%, yet another fresh six-year low, dropping from 3.8% and 4.82%. To obtain the rates, the mortgages required payment of an average 0.7 point. One point is 1% of the mortgage amount, charged as prepaid interest.

Mortgage rates have been dipping slightly these past few weeks, hovering at record levels. From the looks of the recent reports on the housing market and overall economy, they are likely to stay low for a little while. This is good news for buyers who want to lock in a low rate because now is the time. There has also been a recent increase in refinancing mortgage applications as well.

Are you considering refinancing your current mortgage? Do you need financing on the new home you wish to buy? We can help you take advantage of these great rates.

Mortgage Rates Continue to Hit Record Lows is a post from: mesa-az-mortgage.com

The New York Times reports that given the economic circumstances, interest rates have nowhere to go but up. Economists say that this is the inevitable result of:

• Ballooning national debt
• Prospective inflation renewal
• And recovery from the recession

The housing market will likely be the first area to see the increase. Additionally, the Federal Reserve has halted its $125 trillion mortgage debt program which just adds to pressure to raise interest rates. The MBA (Mortgage Bankers Association) expects rates to reach 5.5 by summer and 6 by the end of the year. Just a one point increase can raise the price of a home by up to 19%.

“Americans have assumed the roller coaster goes one way,” said Bill Gross, whose investment firm, Pimco, has taken part in a broad sell-off of government debt, which has pushed up interest rates. “It’s been a great thrill as rates descended, but now we face an extended climb.”

Mortgages won’t be the only thing to see increased rates. Credit Cards have already begun to rise–the Fed reported in February that the national credit card interest rate average is 14.26%, the highest since 2001. Likewise, car loans have seen an increase in about 1.5% since December.

“We’ve gotten spoiled by the idea that interest rates will stay in the low single-digits forever,” said Jim Caron, an interest rate strategist with Morgan Stanley. “We’ve also had a generation of consumers and investors get used to low rates.”

The question isn’t so much WILL the rates go up, but rather WHEN? And HOW MUCH?

Interest rates and housing prices are still presently quite low as it stands. It is the perfect opportunity for homebuyers to act on the many opportunities available to homebuyers. You may be interested in jumping on the path to homeownership or seeing if you may qualify for an FHA loan.

Interest Rates Can Only Go Up From Here is a post from: mesa-az-mortgage.com

Today, The Federal Open Market Committee voted 9-1 to keep the Federal Funds Rate between 0 and 25 basis points as it has been for the past 15 months. However, this is no guarantee.

Federal Funds Rates vs. Mortgage Rates

• When the Federal Reserve votes to leave the Federal Funds Rates as they are, it’s not the same as keeping mortgage rates the same.  The Federal Reserve’s powers don’t extend to mortgage markets. Mortgage rates are created as a result of open trading on Wall Street. The Federal Funds Rate and mortgage rates are unrelated.

• In the past 20 years, there have been several instances where the two have been within 1 point and as wide as 5 points in spread. Before that, there are instances where the spread has been negative. A standard 30-year fixed mortgage rate was less than the Federal Funds Rate. This non-linear spread alone is an indication that the two are unrelated.

The FOMC’s Statement Will Affect Rates

• Though the Fed announced its intent to keep the Fed Funds Rate near zero “for an extended period of time”, this will still have an affect on mortgage rates. The press release carried a positive tone and a more upbeat view about the economy and economic growth. They also called attention to an increase in business spending, another small sign that the current market conditions are possibly improving. Though there was no indication that Federal Funds Rates would rise at any given time in the near future, this optimistic announcement will cause mortgage rates to rise.

Locked Loans

• If you are already locked in on your loan, your rate should not change. If you are not yet locked in, talk to your loan officer. If rates go up, as they are likely to do, you may be affected.

How Federal Funds Rates Affect Mortgage Rates is a post from: mesa-az-mortgage.com