By STEVE KERCH
The benchmark 30-year fixed-rate home mortgage in the U.S. fell to a national average of 5.17% this week, the lowest since Freddie Mac began its weekly rate survey in 1971.
With the Federal Reserve cutting its interest rates to near 0% and a continued decline in rates on the long-term Treasury notes that mortgages closely track, rates on other types of mortgages dropped again, though not as much as the 30-year.
"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac chief economist. "The decline was supported by the Federal Reserve announcement on Dec. 16, when it cut the federal-funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."
The 30-year mortgage fell for a seventh consecutive week, from 5.47% a week ago. A year ago the 30-year averaged 6.14%.
The 15-year fixed-rate mortgage averaged 4.92%, down from last week when it averaged 5.20%. A year ago the 15-year loan averaged 5.79%. The 15-year mortgage hasn't been lower since April 1, 2004, when it averaged 4.84%. Click HERE to view the whole article.
Monday, December 22, 2008
Tuesday, December 16, 2008
Fed Cuts Target for Key Rate to Record Low
WASHINGTON (AP) -- The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.
The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.
The Fed's aggressive move was greeted enthusiastically by Wall Street. The Dow Jones industrial average rose about 350 points in late-afternoon trading.
The Fed's action and statement made clear that economic conditions have worsened since its last meeting in October.
Federal Reserve Chairman Ben Bernanke and his colleagues said they will use unconventional methods to try to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. For example, the Fed last month said it planned to purchase up to $600 billion in direct debt and mortgage-backed securities issued by big financial players including Fannie Mae and Freddie Mac in an effort to boost the availability of mortgage loans.
That move was one of a series the central bank has taken to increase its loans by hundreds of billions of dollars as a way to deal with the worst financial crisis to hit the country in more than 70 years.
The Fed on Tuesday also made clear that it intends to keep the funds rate at extremely low levels.
"The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time," the central bank's panel that sets interest rates said in a statement.
Even before the announcement of a lower target, the funds rate has been trading well below the old target of 1 percent. For November, the funds rate had averaged 0.39 percent. Analysts said it was likely to fall further with the Fed setting the new target as low as zero.
The Fed's decision was matched by a reduction in the prime lending rate, the benchmark rate for millions of business and consumer loans. Banking giant Wells Fargo and Co. said it was cutting its prime rate to 3.25 percent, down from 4 percent before the Fed action. Other banks are expected to quickly match Wells Fargo's move. To View the whole article CLICK HERE
The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.
The Fed's aggressive move was greeted enthusiastically by Wall Street. The Dow Jones industrial average rose about 350 points in late-afternoon trading.
The Fed's action and statement made clear that economic conditions have worsened since its last meeting in October.
Federal Reserve Chairman Ben Bernanke and his colleagues said they will use unconventional methods to try to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. For example, the Fed last month said it planned to purchase up to $600 billion in direct debt and mortgage-backed securities issued by big financial players including Fannie Mae and Freddie Mac in an effort to boost the availability of mortgage loans.
That move was one of a series the central bank has taken to increase its loans by hundreds of billions of dollars as a way to deal with the worst financial crisis to hit the country in more than 70 years.
The Fed on Tuesday also made clear that it intends to keep the funds rate at extremely low levels.
"The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time," the central bank's panel that sets interest rates said in a statement.
Even before the announcement of a lower target, the funds rate has been trading well below the old target of 1 percent. For November, the funds rate had averaged 0.39 percent. Analysts said it was likely to fall further with the Fed setting the new target as low as zero.
The Fed's decision was matched by a reduction in the prime lending rate, the benchmark rate for millions of business and consumer loans. Banking giant Wells Fargo and Co. said it was cutting its prime rate to 3.25 percent, down from 4 percent before the Fed action. Other banks are expected to quickly match Wells Fargo's move. To View the whole article CLICK HERE
Friday, December 12, 2008
Mortgage Rates Fall for 6th Straight Week
The average 30-year fixed home loan rate falls to 5.47%, a four-year low, in a sign that the government's efforts to break up the credit market logjam are working.
By Tom Petruno December 12, 2008
Mortgage rates are down for a sixth straight week, a sign that the government's latest efforts to break up the credit market logjam are working.The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said. Click Here for the full article.
By Tom Petruno December 12, 2008
Mortgage rates are down for a sixth straight week, a sign that the government's latest efforts to break up the credit market logjam are working.The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said. Click Here for the full article.
Wednesday, December 10, 2008
Winterizing Your Home
(CBS) If you’re feeling a chill in the air, it’s a good time to think about winterizing your home to reduce your heating bills. Danny Lipford, host of “Today’s Home Owner,” has five cash-saving tips for viewers of The Early Show that he says can really add up. Lipford says inspecting insulation, sealing gaps, and maximizing the heating and hot water systems all will save money. According to the Dept. of Energy, the cost to heat an average home is approximately $1,400. Lipford says you can save close to 50 percent of that, if your home is winterized the right way. Lipford uses a total home approach and looks at various areas where heat may escape or not be used efficiently. Whether you live in one of the coldest areas of the country or in a milder climate, any or all of the following steps will help reduce heating bills. Inspect Your Insulation Since warm air rises, the single most effective way to save on heating is to have adequate attic insulation. If you don't know how to tell, look for your ceiling joists. If you can see them, you need more insulation. Lipford uses the new "Miraflex Insulation" for homes. It is the first new glass-fiber insulation to be developed in nearly 60 years. Traditional insulation, known for being scratchy and irritating to the skin, costs approximately 25 cents per square foot. Miraflex is about twice as much, but Lipford estimates the yearly savings from using it could be as much as $150 to $200. Click HERE to view the complete article.
Friday, December 5, 2008
It's a Good Day for Rates
This morning we received some economic data. First the jobless claims, economists where expecting 525,000 but we got a better number of only 509,000. This would be a negative for mortgage backed securities as we missed the estimate on the positive side; however the continuing claims came in worse at 4.087million after last weeks 3.962 and the highest level since 1982 causing a push. Next we got factory orders and economists where expecting -4.5%, but this came in worse at -5.1% which is a positive for mbs. On this news, mbs started to rally and currently we are up on the day about 3 ticks but off the highs.
Yesterday there was some news about a new plan by the Treasury to lower rates to 4.5%. This is a rumor from unnamed sources and there are conflicting reports. I read some of the reports which said this would be for purchase loans only, and I read other reports that this would be for purchase and refinance transactions. Until we get an official announcement from the Treasury, I do not consider this to be relevant.
Lenders are starting to pass along the improvements we have be seeing onto their rate sheets and we should see very good pricing this morning with rates at 5% or lower. We are approaching some resistance overhead, so stay tuned and we will alert if you should lock, but for now float club is in session.
Yesterday there was some news about a new plan by the Treasury to lower rates to 4.5%. This is a rumor from unnamed sources and there are conflicting reports. I read some of the reports which said this would be for purchase loans only, and I read other reports that this would be for purchase and refinance transactions. Until we get an official announcement from the Treasury, I do not consider this to be relevant.
Lenders are starting to pass along the improvements we have be seeing onto their rate sheets and we should see very good pricing this morning with rates at 5% or lower. We are approaching some resistance overhead, so stay tuned and we will alert if you should lock, but for now float club is in session.
Wednesday, December 3, 2008
Mortgage Rates Fall
NEW YORK - Mortgage rates fell for the second day in a row Wednesday, and could be heading toward levels home buyers and owners haven’t seen this year.
That drop is what the Federal Reserve was aiming for when it announced a plan Tuesday to buy $600 billion in mortgage-related securities in an effort to slow falling home prices and rising foreclosures, while kick starting demand among fearful homebuyers.
The average interest rate on a 30-year fixed-rate mortgage Wednesday was 5.76 percent, the lowest it has been since February, according to HSH Associates, which publishes mortgage information. The lowest daily figure this year was 5.47 percent on Jan. 23. CLICK HERE to view the rest of the article.
That drop is what the Federal Reserve was aiming for when it announced a plan Tuesday to buy $600 billion in mortgage-related securities in an effort to slow falling home prices and rising foreclosures, while kick starting demand among fearful homebuyers.
The average interest rate on a 30-year fixed-rate mortgage Wednesday was 5.76 percent, the lowest it has been since February, according to HSH Associates, which publishes mortgage information. The lowest daily figure this year was 5.47 percent on Jan. 23. CLICK HERE to view the rest of the article.
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