REALTOR® Magazine Online Daily News - August 28th, 2009

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Mortgage Rates Fall in Response to Speculation about Overnight Bank Rates

By MortgageNewsDaily

Rates for both short- and long-term mortgages tumbled last week according to Freddie Mac's Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage (FRM) dropped to an average of 6.26 percent with 0.6 point for the week ended July 17. The previous week the 30-year averaged 6.37 percent also with 0.6 point.

The 15-year FRM averaged 5.78 percent with 0.6 point, down from the previous week when it averaged 5.91 percent with 0.6 point.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) carried an average interest rate of 5.80 percent, 2 basis points below the average a week earlier. Points averaged 0.6 both weeks.

One-year Treasury-indexed ARMs averaged 5.10 percent with 0.6 point compared to 5.17 percent with 0.5 the week before.

"Mortgage rates fell this week amid market speculation that the Federal Reserve (Fed) may not raise the overnight bank-lending rate this year after all," said Frank Nothaft, Freddie Mac vice president and chief economist. "Some of the factors motivating the change in market perceptions this week included retail sales for June rising at the slowest pace since February and consumer sentiment in July holding at low levels not seen since 1980.

Read Full Article on MortgageNewsDaily

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