Mortgage Rates Hit A 50-Year Low

According to Kerri Panchuk of HousingWire, some fixed mortgage rates have hit their lowest in the last 50 years. The full story:

Thursday, August 18th, 2011, 9:48 am

The 30-year, fixed-rate mortgage hit lows not seen in five decades this week as the Federal Reserve committed to keeping the federal funds rate low through 2013, according to the Freddie Mac Primary Mortgage Market Survey.

European debt concerns also riled the market, staving off a hike in mortgage rates, according to Frank Nothaft, vice president and chief economist for Freddie Mac.

The 30-year, fixed-rate mortgage dropped to 4.15% from 4.32% a week earlier and 4.42% last year. Nothaft said 30-year, fixed mortgage rates are at their lowest levels in five decades.

Meanwhile, the 15-year, FRM hit 3.36%, down from 3.50% a week earlier and 3.90% last year. In addition, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.08% this week, down from 3.13% a week earlier and 3.56% a year ago, while the one-year Treasury-indexed ARM averaged 2.86%, down from 2.89% last week and 3.53% last year.

The low rates kept refinancing activity high. In the first half of 2011, refinancing applications represented nearly 70% of all mortgage activity.

Bankrate attributes the record low interest rates to "weakness in the U.S. economy and the accompanying demand for Treasury securities."

According to Bankrate's survey, the 30-year, FRM hit 4.45%, down from 4.46% last week, while the 15-year, FRM hit 3.58%, down from 3.61% a week earlier.

The 5/1 ARM fell to 3.15% from 3.24% a week earlier.

For more information on this, referrals to a local Telluride mortgage broker, or for more information about Telluride real estate, please feel free to contact me at 970-728-1234, buzz@fedorka.com and www.fedorka.com.

"Forget The Market. Buy A House." -- Wall Street Journal, August 18, 2011

Quoted from the Wall Street Journal, August 18, 2011:

Forget the Market. Buy a House.

By Jilian Mincer

With the Dow Jones Industrial Average down more than 400 points today, and many market experts predicting more volatility ahead, some advisers are recommending their clients put some of their cash to another use: To buy that house or summer home at the shore.

Potential homebuyers certainly have plenty of incentives: Home prices are still way down in many parts of the country, and mortgage rates are nearing their all-time lows. Consider: The benchmark 30-year fixed-rate mortgage fell 1 basis point this week, to 4.45 percent — just a few basis points above the record low hit in October 2010, according to the Bankrate.com national survey of large lenders. Freddie Mac, meanwhile, reported today that the 30-year fixed-rate mortgage averaged 4.15% for the week ended Aug. 18, its lowest reported rate in 50 years.

Another reason to act now, say experts: While the recent passage of the debt deal is likely to keep mortgage rates low for now, homebuyers could soon find themselves with fewer incentives once the details of the debt deal are ironed out. Lawmakers have been debating a simpler tax system with lower tax rates and fewer tax breaks that could include reducing the generous mortgage tax deduction as part of the long-term spending cuts that must be agreed on this fall.

Of course, buyers still need significant down payments, stellar credit and job security, but if “you’re financially prepared to do so, it’s a great time to buy a house,” says Greg McBride, senior financial analyst at Bankrate.com. “Affordability is tremendous, and if you’re in a position where you have the financial security that others are lacking, you’re in a great position to grab a good deal.” Rebecca Hall, a financial planner in Reston, Va., said several of her clients have decided to buy second homes instead of putting more money in the market. “People don’t view real estate as volatile as the market,” says Hall. “Housing prices go down, but people aren’t on-line looking at it every day,” she says. “You view housing as a much longer term investment so it’s a little easier to handle [the volatility].”

If I can provide further information on this article or on Telluride real estate, please give me a call at 970-728-1234, email buzz@fedorka.com, or visit my website at www.fedorka.com.