Economy sends mortgage rates down furtherby Tim Manni
According to the latest Weekly Mortgage Rates Radar, rates on the most popular types of mortgages declined this week. The average rate for conforming 30-year fixed-rate mortgages fell by four basis points (0.04 percent) to 3.66 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.73 percent.
“The economic news continues to be tilted in a downward direction,” said Keith Gumbinger, vice president of HSH.com. “Additionally, fresh worries about Spain’s ability to manage its fiscal troubles gives global investors more reasons to pump money into the safety of US Treasury debt, driving yields lower.”
While not currently the lockstep arrangement seen in the past, yields on Treasury bonds influence fixed-rate mortgage interest rates both upward and downward.
“Excepting a modestly improving housing market, there has been very little good news to counterbalance all the troubles in the headlines. If economic growth doesn’t show signs of improving before too much longer, the Federal Reserve may be forced to take action to shore up the economy”, Gumbinger explains. “However, with interest rates already at record lows, there may be little additional punch from further declines.”
Housing: A bright spot in the economy?
As odd as it may sound, housing has become a glimmer as opposed to a glare. In fact, Fannie Mae called housing a “bright spot” this week.
“Home sales increased by 9% in the most recent Fannie report while single-family starts are up almost 20% year-over-year, reported HousingWire. “Further, the share of polled consumers who say they would buy a home if they were going to move increased by 6 percentage points to the highest level seen in the survey’s two-year history.”
Realtors in metros across the U.S. reported to HSH.com that home prices and home sales either stabilized or were on the rise during the second quarter. Agents from California to Rhode Island weigh in prices, buyers, distressed real estate and financing restrictions in our latest Real Estate Roundup.