For qualified buyers, fixed and adjustable mortgages are more attractive than ever
RealtyTimes reported that Freddie Mac’s weekly mortgage survey, the first since the Fed’s Operation Twist announcement last week, found the average rate for conventional 30-year fixed mortgages to be at an all-time low of 4.01 percent.
As Ed Ferrara pointed out in RealtyTimes, these low rates are a reflection of the slow pace of the economic recovery. Nonetheless, this still offers home buyers in the position to buy (and borrow) an expanded opportunity to take advantage of the rare double whammy combination of low rates and low home prices.
FHA mortgage rates, which are ideal for borrowers whose credit is not the best, remain slightly higher than conforming mortgage rates. Given the easier credit qualifying, along with more inclusive policies regarding using approved gifts, housing grants and bonds for the transaction, these mortgages have been on the rise.
HSH.com’sweekly Mortgage Rate Radar puts the average rate for 30-year fixed-rate mortgages at 4.13 percent. Keith Gumbinger, HSH.com’s vice president, noted that while the lower rates may help spur some additional economic growth,
“if the programs are successful, the economy will begin to grow more strongly, and that would tend to firm up interest rates over time. As such, the lowest mortgage rates as a result of the Fed program are likely to come sooner than later.”
The low rates seem to be spurring increased refinancing activity, but not yet having the hoped-for impact on purchase loans. Inman News reports that the Mortgage Bankers Association’s weekly survey shows refinancing requests up 11.2 percent from the week ending September 16th to the following week. Demand for new purchase loans rose 2.6 percent from the previous week, to reach about the same level as the same time last year.