For those few people out there looking to buy a house, the news could not be any better. Housing prices continue to fall and now plunging mortgage interest rates are your friend.
Interest rates on 30-year-fixed mortgages have dropped this week to their lowest levels in about 37 years.
The recent decline occurred as the Federal Reserve pledged to pour money into the lagging mortgage market in an attempt to revive the broken U.S. housing market.
Freddie Mac reported that the average interest rate on a 30-year fixed-rate mortgages has dropped down to 5.19 percent from 5.47 percent last week. This rate is now the lowest seen since April of 1971.
Interest rates on 15-year fixed-rate mortgages also dropped this week. They are now at an average of 4.92 percent, a decline from 5.2 percent seen last week.
Mortgage rates began immediately falling after the Fed kicked off a new program in late November to try to assist the housing market, by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
We’ll have to see how this all shakes out in the housing market, but one group is quickly taking advantage of the ultra-low rates. Homeowners from around the country are currently scrambling to refinance their mortgages.
Mortgage brokers from across the country are reporting a huge surge of phone calls from borrowers who are now trying to take advantage of the Federal Reserve’s interest rate cut this week.
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Todd W. 12.19.08 at 8:08 am
I can’t believe interest rates have dropped so far. It’s great news for consumers in the market. I personally will now look at re-financing my loan to secure a good long-term deal.
Along with falling gas prices, there really is a Santa Claus.