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Interest rate drop fuels demand

Interest rate drop fuels demand

According to Freddie Mac, 30-year-fixed-rate mortgage average fell further to 4.87 percent with an average 0.7 point for the week ending Oct. 8 from 4.94 percent last week. "Such low rates are spurring mortgage demand," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

"Interest rates for 30-year fixed-rate loans were the lowest since mid-May; 15-year FRMs were at a record low since data were first collected in 1991 and 5-year ARMs also hit an all-time record starting in 2005. Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing.

In addition to spurring mortgage demand, applications were up to a 19-week high over the week ending in Oct. 2, according to the Mortgage Bankers Association - applications to purchase a home were at the strongest pace since the beginning of 2009.

Posted by Julie Staradumsky CREN on 10/16/2009 05:00 PM

Comments (6)

Interest Rates Drop in the ActiveRain Channel

intrest rates, mortgages, freddie mac, franny mae, ginnie mae, 30 year mortgage, first time home buyer, streamline refinancing, refi

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6 Comments on Interest rate drop fuels demand

OCT

Julie,

Good to know, thank you for the post!

-David

A little known fact, a 1% increase in interest rates is equal to an 11.1% increase in the price of the house. That's a little tid bit I use to get people off of the fence.

Interest rates going down should get some folks to move. On the other hand once they increase it might scare a few more into the market who were waiting.

OCT

GOod information, and I like France and Marks commment above too!

Scott, I hope to get a few buyer off of the fence!

Hi France and Mark, you are so right! Have a great weekend.

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