Thursday, March 8, 2007

Mortgage rates drop, applications rise

Mortgage rates kept falling for a third consecutive week and reached levels last recorded in early December, according to a survey by the Mortgage Bankers Association issued Wednesday.

As rates dropped, due to last week’s troubles in the stock market, mortgage applications jumped, marking a 7.3% increase for the week ended March 2. Applications were 16.7% above the levels reached this time a year ago.

The rates on 30-year fixed mortgages averaged 6.04%, 0.12 lower than a week earlier, and lower than last year’s 6.31% rate. Fixed 15-year mortgage rates were down to 5.73%, from 5.84% last week. One-year adjustable-rate mortgages slid to 5.79% from 5.92 a week ago. Refinancing applications increased, as consumers saw the low rates as a perfect opportunity to refinance into a fixed-rate mortgage or to lock in better terms.

More refinancing applications are expected to be filed, as ARMs taken in recent years are poised to adjust in 2007. Housing market activity will be closely monitored in the weeks to come, with the Fed meeting for policy-making on March 20-21. While a rate hike is deemed highly improbable, there is some speculation as to whether the Federal Reserve will cut rates or not.

1 comment:

Scott Townson said...

I think mortgage rates will continue to drop and be under 6% within 2 or 3 months tops. There is a great opportunity right now for real estate investors.