Mortgage Rates Hit 5-Month Low

Good morning readers,

Good news today from Bankrate.com. Mortgage rates continue to drop, reaching a 5-month low this week. These decreases have caused a spike in mortgage applications and real estate purchases nationwide. We’re seeing great rate packages on 30 year fixed loans, 30 year jumbo loans and short-term ARMs.

Interestingly, as the Crested Butte real estate market goes through it’s recent value corrections and huge price reductions now is the time to start looking hard at investment property opportunities in our local market.

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Channing Boucher
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Daily Real Estate News  |  August 24, 2006

Mortgage Rates Decline to 5-Month Low
 
Last week’s better-than-expected reading on the Consumer Price Index helped to push mortgage rates down to a five-month low, according to Bankrate.com’s weekly mortgage survey of large lenders.

The average 30-year, fixed-rate mortgage fell to 6.48 percent, the lowest since March 29, while the average 15-year, fixed-rate mortgage, popular for refinancing, dropped by a similar amount to 6.19 percent.

On larger loans, the average jumbo 30- year, fixed-rate declined to 6.74 percent. Adjustable-rate mortgages also backtracked. The average 5/1 ARM slid to 6.24 percent, and the average one-year ARM retreated to 6 percent.

Slower economic growth has helped bring fixed mortgage rates to a five-month low, along with the Federal Reserve Board hitting the pause button on rate increases. Although inflation remains a threat, bond investors are confident in the Fed’s forecast that inflation will recede as the economy cools, Bankrate.com says in its report.

Fixed mortgage rates have fallen nearly one-half of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090.

With the average 30-year fixed rate now 6.48 percent, the same loan originated today would carry a monthly payment of $1,040.74. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments.

Source: Bankrate.com (08/24/06)

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