The Freddie Mac Primary Mortgage Market Survey, which came out last week, showed that both long-term and short-term interest rates for conventional mortgages are going to go down by a lot. This was expected before the Federal Reserve cut interest rates by a half point on Tuesday.
Even though there isn't a direct link between the twisted rates set by the Federal Reserve and the treasury rates that set mortgage interest rates, there is still a connection between the two. According to the survey by Freddie Mac and the Mortgage Bankers Association, the interest rate is likely to drop again in the coming week.
Freddie Mac said that the average fixed 30-year mortgage rate was 6.31 percent with an average of 0.5 points the week before. This was 15 basis points less than the average of the week before, when both fees and points averaged 0.5 point. This was the lowest rate since the week ended on May 17, when the average interest rate was 6.21 percent and 0.4 point. The interest rate on a 30-year fixed mortgage was 6.43 percent at this time last year.
The average 15-year fixed-rate mortgage interest rate went down from 6.15 percent and 0.6 point to 5.97 percent and 0.4 point. After May 17, when the average rate was 5.92 percent, this is the second lowest interest rate. In 2006, the average rate at this time was 6.11 percent.
In the case of Adjustable Rate Mortgages, the average interest rate for a one-year treasury-indexed adjustable rate mortgage went down 12 basis points from 5.74 percent last week. The fees and points, on the other hand, went from 0.6 to 0.8.
People think that the almost 0.15 percent drop in interest rates for 30-year fixed-rate mortgages and 15-year fixed-rate mortgages will give people who want to refinance or buy a home more freedom. Because of this change in the mortgage market, all average interest rates are now lower than they were at the same time last year. People who took out a mortgage loan right before the end of the week on September 14 are pretty upset and cursing their luck.
A report from the Mortgage Banker Association says that rates have gone up a bit this week. For example, the fixed rate on a 30-year mortgage went up from 6.25 percent last week to 6.29 percent this week. In the same way, the 15-year fixed mortgage rate has gone up from 5.90% last week to 5.99% this week.
Seasonal adjustments show that mortgage activity went up by 2.4% from the week before, which was shorter because of the Labor Day holiday. The rise was about 25.6% when it wasn't taken into account, and it was 12.8% higher than at the same time in 2006.
Last week, refinance mortgages made up 42.1 percent of all mortgage activity. This week, they made up 43.5 percent. On the other hand, the share of mortgage applications for adjustable rate mortgages dropped from 13.2 percent to 12.6 percent.
