MORTGAGE RATES EDGE HIGHER AS APPLICATIONS SOAR
As the government seeks investors in bonds to finance the bailout, interest rates will rise. The following news item also indicates the increase in re-finance and purchase applications. I expect that if interest rates continue to rise, those sitting on the sidelines will come out, and housing prices will stabilize. There are indications this is already taking place.
There is pent up demand in my opinion for homeowners wishing to make a change, whether downsizing or upsizing, but have been reluctant in the near term past. As jobs stablize, these people will "come to market".
Mortgage Rates Edge Higher as Sales, Refinancing Applications Soar 04/09 08:37 AM
11:37 AM Eastern Daylight Time, 04/09/2009 (MidnightTrader) -- Mortgage rates edged higher this week, but the average rate for a 30-year fixed-rate mortgage is still under 5%, according to the latest government survey of the market released this morning.
Homebuilder stocks are higher across the board, and the Philadelphia Housing Sector Index is up 6.52% in mid-morning trading, as mortgage refinancings soar. Since the end of February, home purchase applications are up about 22% and refinancing applications are up 129%, according to the Mortgage Bankers Association.
Freddie Mac's weekly survey of conforming mortgage rates found that 30-year fixed-rate mortgages were averaging 4.87% for the week ending April 9, up from last week's 4.78% average, but down from the average 5.88% rate a year ago. The 15-year fixed-rate mortgage averaged 4.54%, up from 4.52% last week,and down from 5.42% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.93%, up slightly from 4.92% last week, but still well below their 5.56% average a year ago. One-year Treasury-indexed ARMs averaged 4.83%, up from last week's 4.75%; the ARMs averaged 5.18% a year ago.
"Mortgage rates rose slightly this week but still remained historically low," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release. "Interest rates for 30-year fixed-rate mortgages have averaged below 5.0% for the last four weeks, which should keep homeowner affordability at record levels."
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