Mortgage Rates Near All-Time Lows

Mortgage Rates Near All-Time Lows

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Approaching historic low mortgage rates.

If you are in the market for a new home or are eligible for refinancing, then you may want to take a look at the current mortgage rates which are just above their all time lows. That’s right, rates on a variety of mortgage products have neared historic low numbers which means one thing: you may want to make your move now before inflation drives rates higher.

Low Rates

mortgage money
Reporting for the June 11, 2010 issue of the Los Angeles Times, Scott Reckard noted that the average 30-year fixed rate was at 4.72 percent last week, with 15-year mortgages now at 4.17 percent. That latter product is the lowest rate noted by Freddie Mac since it began to track the rate in 1991.

While rates remain low, housing demand has fallen since the April 30 end of the federal tax credit program. That program allowed eligible new homeowners to receive an $8000  tax credit with select existing homeowners eligible to claim a different $6500 tax credit. In May, the Mortgage Bankers Association reported that loan applications had fallen by 35 percent, underscoring the drop off in demand following the end of the federal program.

Market Discomfort

Said Michael Fratantoni, MBA’s Vice President of Research and Economics.  “Although rates remained essentially flat, refinance applications dropped this past week for the first time in a month.  Despite the historically low rates, many homeowners have already refinanced recently, remain underwater on their mortgages, have uncertain job situations, or have damaged credit following this downturn, and therefore may not qualify to refinance.”

Indeed, some analysts believe that the pool of available refinancers has been drained as tougher financing rules and sustained bad news on the job and economic front loom large.

Already Refinanced

Writing for the June 9, 2010, issue of The Wall Street Journal, Nick Timiraos said, “But many borrowers can’t refinance because they don’t have enough equity, their credit isn’t strong enough, or they’re income has fallen in recent years.” These same borrowers may have already taken advantage of lower interest rates from previous months and would gain nothing refinancing now.

Looming inflation is the big question mark for many as the federal government’s enormous debt will soon have to be repaid. Higher taxes will likely force prices up while discretionary spending drives demand for a variety of consumer products down. With unemployment hovering around the 10 percent mark and many more people working part-time or fewer hours than they would prefer, the long term outlook remains bleak.

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Categories: Home Financing, Money News

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