As yesterday’s latest survey revealed an uptick in home prices throughout the nation, mortgage rates dropped and mortgage applications rose. The latest survey by the Mortgage Bankers Association showed that demands for home refinancing loans jumped, however, the demand for loans to purchase a home actually fell – most likely due to the expiration of the homebuyer tax credit.
Meanwhile, Federal prosecutors are currently investigating financial group Morgan Stanley’s role in the real estate crisis. Did they or did they not bet against mortgage derivatives – a la Goldman Sachs – knowing the toxicity of such subprime loans? According to Marketwatch, traders called such deals “the dead presidents” because they were named after presidents James Buchanan and Andrew Jackson.
If the Goldman Sachs investigation is any indication, then mortgage rates are likely to remain low. Ever since the Federal Reserve pulled out of the mortgage market, rates have evened out despite an initial spike. However, the current low rates are may also be indicative of the recent financial meltdown in Greece, which has investors flocking to U.S. Treasurys. Treasurys are traditionally tied to mortgage rates and react accordingly.
Today’s Mortgage Rates At A Glance
The newest numbers from the MBA reveal that homeowners are paying attention. The 30-year fixed-rate home loan dropped to its lowest point since mid-March. In fact, the Refinance Index actually rose 14.8 percent from the previous week.
Homeowners who are doing the bulk of the refinancing activity are taking advantage of the ultra low rates put in place by the Fed to stem the tide of financial damage caused by subprime loans. According online real estate marketplace, Zillow, the 30-year fixed-rate home loan average is at 4.79 down a percentile from Tuesday. The 15-year fixed-rate loan is also down a percentile to 4.24 percent. The 5-year adjustable rate mortgage, however has spiked from 3.50 percent yesterday to 3.85 percent Wednesday.
In comparison, the mortgage rates at Bankrate.com are also on the downswing. Their 30-year fixed-rate average is 5.03 percent from 5.09 percent. The 15-year fixed-rate mortgage average is at 4.30 percent down from 4.36 percent. The 5-year ARM is at 3.67 percent from 3.72 percent last week.
Written by Lani Shadduck
HULIQ.com
Source: MarketWatch.com;MBAA.org
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