At the beginning of August, the interest rates on mortgages were pretty stable. Except for a small number of mortgage programmes, most of the interest rates stayed the same as they were in the last week of July. Rates for 10-Year Treasury and 30-Year Treasury mortgages went down by 0.06 percent and 0.04 percent, respectively. And the interest rates for programmes like USD LIBOR 6-month and USD LIBOR 1 Year went up by a very small 0.015 percent and 0.022 percent. Aside from these, the average interest rates for the 30 year fixed, 15 year fixed, 5/1 ARM, 3/1 ARM, and some other programmes did not change.
Most mortgage interest rates went down by a decimal point on the third day of the month because market conditions changed. But the interest rates on short-term mortgage loans like USD LIBOR 6-month and 1-year loans went up to 5.318 percent and 5.230 percent.
The mortgage interest rate changed a lot in the first 15 days of the month. Even though the average rate of change was very small, it kept going up and down. Most of the time, the interest rates on short-term loans were affected and changed every day.
Analysts think that the recent rise in unemployment is to blame for the drop in the mortgage business. Some people think that the recent big drop in the mortgage market is because lending standards are getting stricter and home prices are going down. In fact, this drop in mortgage rates has already started to affect subprime lending.
Because mortgage interest rates went down, the number of mortgage applications in the U.S. went up for the second week in a row. Experts think that the recent trouble in the mortgage market is the reason why the number of applications is going up. The housing market and the market for homebuilders are both down, as are the markets for financial companies and mortgage companies. Last week, the drop in the mortgage market quickly spread to the financial markets, making people worry that tighter credit will have a bigger effect on consumers, markets, and the economy as a whole.
Interest rates for the 80% of homeowners and buyers who can get A-paper mortgages are likely to stay the same or go up a little bit in the near future, according to predictions. People with bad credit or who don't have the right paperwork to prove their income may have trouble getting loans or may have to pay higher interest rates or a big down payment.
