Mortgage Rates Remain Unchanged This Week
Mortgage rates held onto last week’s substantial gains, ending mixed on the week, the weekly Freddie Mac survey showed Thursday.
The government-sponsored mortgage loan buyer said the average interest rate on a 30-year fixed-rate home loan remained at 6.73 percent for the week ending July 19.
A year ago at this time, 30-year mortgage rates averaged slightly more, at 6.80 percent.
“Mortgage rates lingered near the previous week’s level as the latest economic indicators did not affect inflation expectations significantly,” said Frank Nothaft, Freddie Mac’s chief economist, said.
“Recent statistics suggest the housing market has yet to reach a trough. Although June’s housing starts unexpectedly rose to 1.47 million units, construction of one-unit houses still saw a decline of 0.2 percent… it was the slowest pace since January.”
While the concerns over bad credit mortgage lending continue to linger, so far the delinquent loans have not resulted in major economic turmoil.
However, rising rates, among other factors, caused industry groups like the Mortgage Bankers Association (MBA) and the National Association of Realtors to push back their forecasts for a home price recovery. Both groups are now calling for early 2008, compared with a previous outlook for mid-2007.
Doug Duncan, chief economist for the MBA, expects mortgage rates to top out near 7 percent by the end of the year. When rates go up, would-be buyers face higher mortgage payments, cutting into overall affordability.
Freddie Mac said that rates on 15-year fixed-rate loans - a popular option for mortgage refinance seekers - averaged 6.38 percent in the latest week, down from 6.39 percent last week.
A year ago, the 15-year home loan rate averaged 6.41 percent.
Five-year adjustable-rate mortgages (ARMs) also held steady, averaging 6.35 percent this week, unchanged from seven days ago.
A year ago, the 5-year ARM averaged 6.36 percent.
One-year ARMs averaged 5.72 percent this week, up slightly from last week.
At this time last year, they averaged 5.80 percent.
SOURCE: CNN Money