 |
 |
30 Year Fixed Rates Dropped Second Consecutive Week
 E-mail Friend
 Printer Friendly
WASHINGTON, DC - For the second consecutive week in a row
30-year mortgage rates dipped. Those investors heavily leveraged in the bond market likely uttered sighs of relief that the Fed has not become overly concerned about inflationary pressures recently. For those just beginning to follow interest rate trending, it is useful to know that the Bond Market plays heavily on
mortgage rates. Generally, when one goes up, the other will drop. This is a good rule of thumb but can deviate often, depending widely on other various
areas ranging from pressures at the consumer level of our economy to the futures and commodity markets. In any case, if just becoming familiar with these types of things you now have a thumbnail sketch to go by as far as how the Bond Market can teeter mortgage rates.
Freddie Mac, the foremost name in the mortgage and real estate arena (next to Fannie May) conducted its usual nationwide weekly survey, and thus reported that interest rates on 30-year fixed rate mortgage paper averaged 5.91 percent this week. This is again down. Last weeks tally came up 5.93 percent.
The consecutive drop was the first seen since the end of March, when rates for the same hit 6.04 percent. That figure proved to be the highest interest rate average since July of last year.
For the most part, the decline was attributed by authorities and analysts mostly to be as a result of the release of March 22nd's Fed meeting minutes. Commentary by Fed officials that were published in the minutes seemed to have eased concerns of Bond Market investors that the Federal Open Market Committee
(F.O.M.C.), was increasingly showing signs of worry over inflationary pressure. This appeared at one time to nudge decision makers toward raising rates at a more aggressive pace to soften things in the long-term scope. Apparently the fallout was not to be concerned over, at least not yet.
Although we have seen rates drop a bit sequentially in the past 2 weeks, do not get too comfortable with the idea of steady declination. F.O.M.C. officials indicate that future rate increases would continue and would be gradual.
Chief Economist for Freddie Mac, Frank Nothaft, said in a nutshell after the print of minutes that his predictions is that
30 year fixed mortgage rates will likely rise to around 6.5 percent by the end of 2005. That's not bad all things considered, and furthermore seem like they will not shake the economy if actual increases harmonize with his forecast.
Regarding
15 year fixed mortgages, good news abounded this week as well. The widely utilized 15 year fixed rate refinance dropped to 5.46 percent from 5.48 which was recorded as the average last week.
Interest rates for the one-year
adjustable-rate mortgage actually rose a bit to 4.30 percent. This figure shows an upward gain compared to 4.23 percent last week.
The flip side of the
ARM trend is that five-year adjustable rate mortgages averaged 5.31 percent this week, down from 5.33 percent the prior.
|
 |
|
|
|
|
