Today’s mortgage rates reflect growing concern of the financial debt crisis in Europe, which has singlehandedly thrown stock markets worldwide off kilter and managed to derail talks of economic recovery. Investors are flocking to 10-year Treasury bonds, which are closely tied to mortgage rates. The figures show that the time to refinance or purchase homes is now.
Freddie Mac reported Thursday that mortgage rates had reached all time lows, with the average 30-year fixed-rate mortgage down to 4.78 percent this week, a drop from last week’s 4.84 percent average. Rates on 15-year home loans are following suit with the latest survey average at 4.21 percent.
Still, despite ultra low rates, purchase applications for new homes fell to their lowest levels since 1997. The numbers from the Mortgage Bankers Association’s weekly survey reveal that, while homeowners are taking advantage of refinancing rates, home buying is no longer a priority.
Several factors have lent to the declining home sales. For one, it appears the first time homebuyer tax credit did much to impel Americans that would have not pulled the trigger to actually do so and purchase homes. Now that the credit has expired, Americans are holding back. Secondly, the economy is simply not faring as well as Americans had hoped. Jobs continue to be an issue, and consumer growth is lagging.
To Refinance or Not to Refinance?
Because mortgage rates are so low, many analysts are shouting ‘Now is the time to refinance!’ Many Americans are heeding the advice, yet there isn’t quite a refi boom as seen the same time last year. There can be considerable savings when refinancing, however, homeowners should beware that upfront costs to refinancing can be significant. New mortgages also will make homeowners in debt for longer –essentially restarting the loan process.
Refinancing should be a consideration if one currently holds a mortgage with rates over 6 percent or have an adjustable-rate mortgage. Homeowners whose homes are underwater can also refinance with the help of the government’s Making Home Affordable Refinance program. The program allows homeowners who follow certain guidelines to get a lower rate.
Many lenders are asking for larger down payments. Refinancing should be no problem with owners who have good credit, equity, steady employment and income.
Today’s Mortgage Rates At A Glance
Zillow has long been a source for homeowners who want to keep an eye on mortgage rates. Its Mortgage Marketplace provide a sample from several mortgage lenders and is update on an hourly basis. Today’s mortgage rates on Zillow see the 30-year mortgage average actually climbing to 4.77 percent from yesterday’s 4.68 percent. The 15-year fixed-rate loan average is down, however, to 4.12 percent from Thursday’s 4.14 percent. The 5-year adjustable-rate loan is down as well to 3.60 percent.
As Americans have seen, low rates do not a recovery make. According to Richard J. Dugas of homebuilding group Pulte Group Inc, “The U.S. housing industry is finding, and may have already found a bottom, but that’s different from saying a recovery is at hand.”
Written by Lani Shadduck
HULIQ.com
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