Rise of Current Mortgage Rates Dips Demand

Yet, the number of total mortgage applications were the highest since last June. The demand for mortgages and the direction that the current rates go play well with each other. When the mortgage rates go up the demand comes down, when the rates come down consumers take advantage and apply for new mortgages calculating their monthly payments.

The association says that "the average contract interest rate for 30-year fixed-rate mortgages increased to 5.08 percent from 5.02 percent, with points decreasing to 0.98 from 1.23 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans." In the case of the 15-year fixed plans the mortgages decreased to 4.41 percent from 4.45 percent.

While some news organizations report about the current mortgages rates going up or down it is important for the consumers to use some discernment. The location is very important to take into consideration. The reports may apply to national averages or state averages or to a particular zip code. This is why, for example, when you go to check Bank of America's today's mortgage rates the company wants you to put your zip code to show your the current loan rates based on your local situation.

This morning the major players in the housing loan market significantly lowered their rates in the light of today's news from the Mortgage Bankers Association. Yesterday we reported Wells Fargo's 30 years fixed mortgage rate being at 5 percent. Today the company has lowered it to 4.87 percent, but the same rate with FHA is still 5 percent. The 15-year fixed rate is at 4.5 percent, but the same rate with ARM is 3.87%.

Zillow numbers show that other loan providers also appears to have taken the falling demand into consideration. The Zilloq mortgage graph shows that the average 30-year fixed rate has fallen to 4.98 this morning. It was above 5 percent yesterday. Yet the 15-year fixed rate fall is not that significant. Yesterday the national average 15-year mortgage rate was 4.48 according to Zilloq Marketplace. This morning it is at 4.47 percent.

The cost of the borrowing has stayed pretty low in the past few months. Because of this according to Reuters the real estate industry is "pressing" the Congress provide more incentives and better tax credit options for the home buyers. Particularly they ask to make $8,000 first time home buyer incentive program size to $15,000 thousand to stimulate more home buying. However, the program is set to end in November 30 of 2009.

Written by Armen Hareyan