Friday

Mortgage Rate Drops to 6.1%

Mortgage rates fell sharply this week with rates on 30-year mortgages dropping to the lowest level in more than two years. U.S. fixed-rate mortgages fell again according to Freddie Mac's survey released yesterday. 30-year mortgage rates dropped to an average of 6.10 percent this week, their lowest level since the week ended Oct. 13, 2005, when they averaged 6.03 percent. Analysts attributed the decline to increased worries that a severe slump in housing and a continuing credit crunch could drag the economy into a recession. The recent turbulence in stock markets has prompted many investors to rush to the safety of U.S. Treasury securities, driving down the yields on bonds. Fifteen-year mortgage rates declined to their lowest level in more than a year, falling to 5.73 percent from 5.83 percent last week. It was the lowest rate since the week ended Jan. 26, 2006, when the 15-year averaged 5.70 percent. For five-year adjustable-rate mortgages, rates edged down slightly to 5.86 percent, compared with 5.88 percent last week. Rates on one-year adjustable-rate mortgages edged up slightly to 5.43 percent, compared with 5.42 percent last week. The housing market has been suffering through a severe slump following five years of record sales. The weakness is expected to persist well into next year.

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