Sharp Drop in Mortgage Rate This Week
This week, Freddie Mac reported a sharp drop in long term mortgage rates that coincided with inflation reports, short-term interest rate cuts and poor retail sales.
Mortgage rates dropped from the previous week’s 6.13 percent to this week’s 5.87 percent. This drop is applicable to 30-year fixed rate mortgages. On the other hand, the 15-year fixed rate mortgage experienced a drop from 5.6 percent to 5.27 percent. The said decline was believed to be the result of various efforts made to improve the market’s liquidity.
These efforts included the decision of the Federal government to cut interest rate on short-term loans. Aside from this, the report from the Consumer Price Index showed weaker increases in prices compared to consensus expectations. In fact, the month of February revealed unchanged energy and food costs.
On the other hand, retail sales dropped by about 0.6 percent last month which is a far cry from the expected 0.2 increase. This could indicate that the national economy is actually weaker than most experts believe.
For buyers and investors, a low mortgage rate is actually encouraging. And with the many foreclosure properties to choose from, you will really enjoy the favorable conditions. Buyer confidence will certainly improve very soon as the federal government continues to look for ways to resolve the housing crisis.
f you are really keen on buying a foreclosed home, it will be to your best interest if you subscribe to foreclosure listings from reputable realtors such as MostlyForeclosures.com. Before doing so, you should try to get pre-approved for a mortgage first so you have an idea how much you can really afford. Make sure that your financial documents are in order when applying for a mortgage. You should also try to be realistic of your financial capacity in order to avoid over-extending.
