American homebuyers should be absolutely delighted with the fall in overall mortgage rates this week. According to Bankrate.com’s national survey of large lenders, this week saw the biggest drop in home mortgages rates since March ’06. Across the board drops made the news even better. Leading the way, with a 10 basis point drop, from 5.62% to 5.52%, was 5-year adjustable-rate mortgage rates. This was closely followed, however, with a 8 basis point drop, from 5.88% last week to 5.80%, in 30-year fixed-rate mortgage rates. Lagging behind the leaders, with a mere 7 basis point drop, was 15-year fixed-rate mortgage rates. Delight among US home buyers, however, may be short lived among those who recall the 18 basis point drops back in March of this year, which then rapidly rebounded the week after. Economists, however, doubt this is going to happen again this time and predict that US home mortgage rates should stay fairly stable over the next week. Those with 5-year adjustable-rate mortgages must be crunching the numbers at the moment though as a jump into a 15-year or 30-year fixed-rate mortgage must be looking very attractive right about now.
Falling home mortgage interest rates equates to an increase in US house sales? Apparently not. House sales in the US were down year-on-year from August 2005. Worse, home values are falling at the same time and borrowers looking to free up some of the equity in their homes are rapidly changing their minds right now and putting an hold on things. In turn this is cooling down the consumer spending in the US, which is what lead to this week’s dive in overall US mortgage rates and bond yields. All we can hope for now is a turnaround and to have better consumer spending figures, with low US mortgage rates, and increased home sales. But that might be asking for our cake and eating it.
Across the board healthy falls were seen in this week’s Bankrate.com’s national survey of large lenders, week-on-week, from the previous week. Atlanta 30-year fixed-term mortgage rates fell a very healthy 8 basis points for the week from 5.94% to 5.86%, making the 30-year fixed-rate mortgage rates the healthiest fall of the week. Both the 15-year fixed-rate and 5-year adjustable-rate mortgage rates also fell 7 basis points from 5.64% to 5.57% and 5.69% to 5.62%, respectively. A fall of one basis point equates to one-hundredth of one percent.
This slightly more significant fall in overall US home mortgage loan rates, as surveyed by Bankrate.com, will, however, have gone some way to appeasing US homeowners concerned that a cooling US housing market may be dampening the chances of seeing any real equity appreciation in the coming months in certain segments of the US housing market.
The continued buoyant news of mortgage rate reductions over the past 3 months has certainly been warm news to Atlanta home mortgage lenders struggling with a cooling housing market. US refinance mortgage loan applications are on fire at the present time with almost 44% of all recent mortgage applications being refinance mortgage application. In nearly all of these cases, refinancing on 15 or 30 year fixed-term mortgage rates are being sought and overall the refinancing housing mortgage rate as seen an overall increase of 9.5%.
With the continued healthy fall in 5-year adjustable-rate mortgage rates matching those falls in the 30 and 15 year fixed-rate mortgage rates week-on-week of late, however, brave US homeowners may well be adopting a ‘wait and see’ approach to whether now is a good time to jump ship and refinance their home mortgage loan on more favorable terms. With US bond and economic data indicating a cooling economy, however, fortune may be favoring the brave.
A cooling housing market may well be helping to sustain the latest trend in average reductions across the board for Atlanta mortgage rates this week.
Bucking the slight hick-cup of last week and back on track of downward movement, Bankrate.com’s national survey of large lenders has minor reductions across all referenced categories of mortgage rates. According to Bankrate.com’s national survey of large lenders, Atlanta 30-year fixed-term mortgage rates went down 1 basis point, from 5.95% last week to 5.94% this week. The 15-year fixed-term mortgage rate and 5-year adjustable-rate mortgage rate both say reductions of 2 basis points, from 5.66% to 5.64% and 5.71% to 5.69%, respectively. A fall of one basis point is equivalent to one-hundredth of one percentage point. However, while these may look like minor falls, taken as a whole the average fixed-term and adjustable-rate mortgage rates have seen a more significant reduction of at least 0.5% in the last six months, although all of the reference mortgage rates still have some way to go if they are to get back to where they were this time last year.
The slight reductions this week in the 30-year and 15-year fixed-term mortgage rates and the 5-year adjustable-rate mortgage rate will, however, have pleased most homeowners in the US worried that last week’s slight rise in mortgage rates were a sign that US mortgages rates may be going north of the strategically important 6.0% mark again.
With the US Census Bureau counting 3.9 million American households consisting of 3 or more generations living together under one roof in its 2000 census, we are left wondering how long it will be before US mortgage providers follow the lead of English mortgage lender Reliance Building Society by offering multiple generation mortgages that can be repaid over successive generations! An interesting development that might find a home here.
BusinessWeek’s recent cover story that dubbed option ARMs the “nightmare mortgages” will only be adding fuel to the fire for millions of Americans who are currently struggling to understand how the option ARM scheme works. The low introductory mortgage rates, which can be as low as 2.0%, was the deal clincher, but their rate now seems to be steadily heading northwards.
Although the monthly repayment amount on option ARMs only changes once a year, the interest chargeable on the option ARM changes monthly. The net result of this has been the rather bizarre situation where millions of American homeowners with option ARMs are now facing the very real prospect of having a larger outstanding mortgage account at the end of the month than they did at the start. Not a particularly welcome sight just as interest rates look like they’ll be going higher over the long summer holidays and starting into the fall and winter gloom.
As a general rule, Primacy Mortgage only recommends option ARMs to very sophisticated clients who grasp exactly what they are getting into. In the majority of cases, these types of loans only make sense for borrowers who have seasonal or variable income on a month to month basis and need the ability to short pay now and again. If you make only the minimum payment on a regular basis and are not saving the difference in some kind of semi-liquid investment, then you are setting yourself up for serious problems down the road.
A combined short working week with less than stellar financial news on the American economy over the past two weeks has resulted in the adjustable-rate mortgage rate reversing its recent downward trend this week.
According to Bankrate.com’s national survey of large lenders, Atlanta Mortgage Rates this week either held steady or went north, with the biggest mover once again being the 5-year adjustable-rate mortgage rate, which jumped 2 basis points up from last week’s rate of 5.69% to this week’s rate of 5.71%. However, American homeowners with 30 and 15 year fixed-rate mortgages had little to smile about with the 30-year long-term fixed-rate mortgage rate slipping to rise 1 basis point week-on-week, up from 5.94 last week to 5.95% this week; and all the best of this week’s lot, the 15-year fixed-rate mortgage rate, only managed to hold steady at 5.66%.
While ARMs and FRMs still held steady below the crucial 6.0% marker for another week, homeowners with short-term adjustable-rate mortgages must now be feeling the pinch to jump-ship and bail into a long-term fixed mortgage before it’s too late and they’re left holding a north bound ARM rather than what is still an attractive looking long-term FRM.
Atlanta Mortgage Rates this week continued the trend of the last few months with all benchmark fixed-rate and adjustable-rate mortgage interest rates falling again. The net effect of which has placed both short-term and long-term mortgages rates solidly below the 6.0% line.
According to Bankrate.com’s, the benchmark 5-year adjustable-rate mortgage rate showed the most significant week-on-week change with a 6 basis point drop to 5.69%, providing borrowers with food for thought on the question of whether to stick with their adjustable-rate mortgage adopting a wait and see approach to whether there will be further falls in the ARM post Labor Day weekend; but with fixed-rate mortgage holding steady at under 6.0% for yet another week, the temptation to jump ship and refinance with a long-term 15 or 30 year fixed rate mortgage must now be very powerful.
Bankrate.com’s national survey of large lenders also shows benchmark 15-year fixed-rate mortgages fell 4 basis points to 5.66% and 30-year fixed-rate benchmark rates fell a further 3 basis points week-on-week to end up at 5.95%.
While continued southward movement beyond the psychologically all important 6.0% barrier continues to be very welcome good news for home-buyers faced with increased costs everywhere else at moment, many a home loan borrower with an adjustable-rate mortgage will have cause for some serious thought about their long-term finances this holiday weekend with rumblings among many prominent economists that the Fed is faced with the very real prospect of having to put interest rates up shortly if Bernanke’s unofficial target rate of 2% inflation is going to be sustainable.
