Home Loan Rates Decline

Friday, 21 May 2010, 8:56 | Category : Mortgage News, Mortgage Rates
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Home loan rates declined again this week, with many reaching the lowest levels in years, according to Freddie Mac’s weekly survey of mortgage rates.   They have followed U.S. Treasury yields lower over the past several weeks as investor concern builds about Europe’s economic future. The benchmark 10-year yield touched a 5 1/2-month low Thursday.

Freddie Mac Chief Economist Frank Nothaft noted that the low mortgage rates, coupled with tax credits from the U.S. government, have helped strengthen the housing market.   “Moreover, home builder confidence rose for the second straight month in May to the highest level since August 2007,” he noted, citing National Association of Home Builders/Wells Fargo Housing Market Index data.

The 30-year fixed-rate mortgage averaged 4.84% for the week ended Thursday, down slightly from last week’s 4.93% average but up a hair from 4.82% a year ago. Home loan rates on 15-year fixed-rate mortgages were 4.24%, down from 4.3% and 4.5, respectively, to hit the lowest level since Freddie began tracking such loans in August 1991.   Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.91%, down from last week’s 3.95% and 4.79% a year earlier, setting a new low since Freddie started keeping score in 2005. One-year Treasury-indexed ARMs hit a 5 1/2-year low of 4%, down from 4.02% and 4.82%, respectively.

Are you considering a refinance? To obtain these low rates, the fixed-rate home loans required payment of an average 0.7 point, while the adjustable rate loans had an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest

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