Wednesday 7 January 2015

Mortgage Rates Dropping

Posted by at 8:52 AM

Declining Treasury yields are pushing mortgage rates back down toward record lows. The average interest rate on 30-year fixed-rate mortgages fell to 3.76% as of noon Tuesday, according to preliminary data from mortgage information website The last time it came close to this level was in May 2013, according to HSH. A weekly average of 3.44% in December 2012 was the lowest weekly average since the housing-market downturn began. The average rate on these 30-year mortgages has been declining fairly rapidly. It averaged 3.81% on Monday and 3.94% for last week, ended Jan. 2. For the same week a year prior the average was 4.63%.

On Tuesday, the yield on the 10-year Treasury note fell below 2% for the first time since October, hitting the lowest level since May 2013. Interest rates have been declining amid concerns over weak oil prices and upcoming elections in Greece, says Keith Gumbinger, a vice president at “We’re refocusing on the troubles that really haven’t gone anywhere,” he says.

Tumbling rates could give a boost to mortgage originations. Lenders generally report increases in refinancing activity when mortgage rate drop. Lower rates could also provide a jolt to the purchase market by helping borrowers to afford homes they otherwise might not be able to get.

Original Wall Street Journal Article: Here