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Year Mortgages Edge Down

According to the mortgage company Freddie Mac Thursday there has been a slide down in 30 year, fixed rate mortgages which came out at 6.67 percent this week, a decrease from last week's 6.69%. This is in contrast to an 11 month high of 6.74 percent reported a fortnight ago.

Reasons given by analysts for this slight decrease are global developments in bond markets, which are less likely to result in higher inflation, and the deteriorating state of the housing industry.  Frank Nothaft, chief economist at Freddie Mac says, ‘‘this week we saw further effects of the current housing recession.'' He points out that there are an increasing number of unsold homes, the highest in 15 years together with a sharp drop in home sales in a 4 year period. A government report states that in the first 3 months of this year the economy as a whole slowed right down to a 0.7% growth rate, the most worrying in 4 years, with housing a major causative factor.

Although the Fed announcement this week that interest rates would remain where they have been at 5.25% for the past year has caused some market caution, the central bank and Wall Street, are more optimistic as small improvements in inflation readings have been noted.

According to Freddie Mac, this week showed declines in all mortgage rates, from last year when there was a 6.78% rate on 30 year mortgages, a 6.43 rate on 15 year mortgages, a 6.39% rate on 5 year adjustable rate mortgages and a 5.82% rate on 1 year ARMs

Last week showed a fall in interest, of 6.34 percent from 6.37 percent on 15 year, fixed rate mortgages. These constitute a valuable option for homeowners seeking to refinance. There was also a 1% drop in 5 year adjustable mortgages to 6.30% and the same for one year adjustable mortgages from 5.66%. However, these mortgage rates do not take add on fees known as points into account when calculating these figures. These normally stand at 0.5 points nationwide. 

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