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U.S. Mortgage Rates Drop For The Fourth Week In A Row
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LOS ANGELES --
Interest rates have experienced yet
another drop bringing the
30-year fixed rate mortgage to the lowest level seen
since the end of February.
30 year mortgage rates dropping for the fourth consecutive
week can be attributed to additional evidence of economic sluggishness. On the
flip-side, all of this has eased concerns about inflation by bond market
players.
Freddie Mac, the foremost
mortgage industry authority, reported last Thursday in
its weekly survey that
interest rate averages for the typical conforming
30-year
fixed mortgage was 5.78 percent, down from the prior week's 5.80 percent. This
represents the fourth consecutive declination.
Chief economist for Freddie Mac, Frank Nothaft, said that the
market focused attention on the third straight drop in consumer confidence. This
was tracked by the Conference Board in New York and denoted in last Wednesday's
report showing durable goods orders dropped-off in March by an amount surpassing
any others in the last 2 1/2 years.
The numbers, when added-up, indicate strongly that the Fed
must continue to hold back a bit in their intended gradual mortgage rate
increases for short-term notes. The rule of thumb to remember is that inflation
if is thought to be stable, mortgage interest rates slip downward.
Most economic analysts are saying, however, that mortgage
rates will again rise in the forthcoming early summer months, but at a slow and
even keeled pace which should land 30-year rates at around 6.5 percent by end of
2005.
Although recent
appraisal fraud and valuation concerns of
homes countrywide is present, our U.S. housing market has maintained a strong
pace so far this year. This clearly demonstrates that historically low mortgage
rates are continuing to be the fulcrum for home
purchase mortgages.
On that note, it was reported Tuesday that new home sales blew
upward to 1.43 million units in March. This is an all-time high for this market
segment.
The mortgage rate dropping trends of late on 30 year mortgages
are in unison with other mortgage rates. For example, low interest rates for
15-year fixed-rate mortgages, fell to 5.33 percent, down from 5.36 percent the
previous week. This type of conventional home loan has replaced the
adjustable
mortgage rate, or
ARM, in the popularity contest of the past 3 weeks.
Five-year hybrid ARMs had an averaged of 5.20 percent, down
from 5.22 percent the prior week. For the uninitiated: This type
hybrid mortgage
carries a fixed-rate for the first five years and then adjusts each sequential
year following the initial five.
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