Mortgage Interest Rates Fall 10 Basis Points
to 6.07%
(January 3rd,
2008)
Mortgage interest rates fell to their lowest
levels in 4 weeks thanks to the bad news revolving around the
economy, the subprime mess in the mortgage market as well as
high inflation in oil, gas, groceries & commodities. The
average interest rate on a 30 year fixed term mortgage fell
10 basis points from 6.17% to 6.07% (Source: Freddie Mac). The
average origination fees and discount points of 0.5% remained
unchanged from the last survey conducted by Freddie Mac. The
average mortgage interest rate on a 30 year fixed term at this
time last year was 6.18%.
Frank Nothaft, VP & Chief Economist at
Freddie Mac said the new year 2008 has begun with mixed signals
about the direction of the overall US economy and the mortgage
market. He quotes, "On the downside, the Institute for
Supply Management's index of manufacturing activity showed significant
contraction in this sector, perhaps a harbinger of a more substantial
economic slowdown to begin this year."
He adds, "On the upside, the Conference
Board reported that consumer confidence rose in December for
the first time in five months, with more positive expectations
for the next six months." New home sales in November 2007
fell to the lowest level since April 1995. However, existing
home sales rose by a small percentage. Freddie Mac expects the
American housing market to get even worse, before it gets better.
The firm expects total home sale values falling in the first
2 quarters of 2008, then making a slow recovery.
New and existing home sales are expected to
be 5.09 million in 2008, down 11% from the levels in 2007. Here's
how the other mortgage interest rates played out:
- Rates on 15 year fixed term mortgages fell
11 basis points to 5.68%.
- Rates on five-year Treasury-indexed adjustable-rate
mortgages (ARMs) fell 12 basis points to 5.78%.
- Rates on one-year Treasury-indexed ARMs
fell 6 basis points to 5.47%.
Note: Freddie Mac surveys mortgage loan holders
with mortgages of less than $417,000 and only those borrowers
who have good or excellent credit. Freddie Mac does NOT survey
jumbo loans of greater than $417,000 or to borrowers with poor
credit.
