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Home Loan Rates Remain at 3-Month Low
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May 26, 2005 LOS ANGELES -- After experiencing a
second-consecutive week drop, home loan mortgage rates remain at a three-month
low level. The staying power of interest rates at this low of a level comes as a
surprise to homeowners and analysts alike. The primary reason
rates have
remained so low lately comes mainly as a result of the Fed announcing that
inflation is under control. This eases tensions of bond market investors, whose
effect trickles-sideways to affect the mortgage benchmark interest rates.
The average percentage for 30-year fixed rates dropped from
5.78 to 5.72. The average discount point range on a national level was an
average of 0.31.
U.S. homeowners have not seen this low of a rate scale since
the end of February. 15-year fixed mortgage rates, which remain the predominant
choice for mortgage refinancing, declined as well going from from 5.35 percent
to 5.3 percent. The average interest rate for jumbo 30-year fixed rate mortgages
took a menial dive from 5.99 percent to 5.95 percent.
Adjustable rate mortgages
moved somewhat throughout the course of the week but for the most part remain
stable.
Moving upward was the the average 5/1 adjustable mortgage. The
5/1 ARM crept to 5.17 percent. This is merely a nudge above last week's 5.16.
Overall, home loan interest rates have seen a substantive
decline, despite economist projections earlier in the year, and as recently as
the beginning of May.
Since last June, the Fed has raised short-term interest rates
a total of eight times, keeping their promise to raise such in order to maintain
a tight clamp on inflationary ballooning. In short, the Federal Reserve believes
that mortgage rate hikes will keep inflation low in succeeding years. Article
by Nolan Voight - Mortgage Industry Columnist.
Email Nolan Voight.
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