US Mortgage Rates Drop to 5.32%, Freddie Mac Says
Classified as: Interest Rates, Mortgage, News
This week in the US mortgage rates fell. Easing concern the Federal Reserve decision to lower down the mortgage rates by purchasing mortgage-backed securities was losing momentum.
It was said by mortgage buyer Freddie Mac of McLean, Virginia, in a statement that the average 30-year rate dropped to 5.32% which was 5.42%.While the 15-year rate was at 4.77 %.
Efforts are being made by Federal Reserve Chairman Ben S. Bernanke to lower down the borrowing costs. He has got a $1.25 trillion program to purchase securities backed by home loans.
In the last week FED has kept the size of its buying program intact and also the benchmark rate for federal funds was kept at between zero and 0.25 %. In a statement made on June 24 by the Federal Open Market Committee it was said that the rate will stay at “exceptionally low levels” for an “extended period.”
Inflationary Pressure
Yesterday, a statement was made by Dan Gertner, an analyst at New York-based Grant’s Interest Rate Observer, in an interview, that Last month yields on treasuries rose high enough than assets to become more attractive to investors including high-grade corporate bonds. That initiated a rally that led to the decline in yields and a rise in prices.
It was said by the National Association of Realtors yesterday that the index of signed purchase agreements for homes, or pending home re-sales, had raised 0.1 percent in May, and in June it has been increased up to 7.1 percent.
Last week a huge fall was seen in U.S. mortgage applications since February. In the week ended June 26, there has been a drop of 19% to 444.8 in the Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan. There was a 4.5% fall in purchase applications while a 30% fall has been recorded in requests to refinance.
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