Mortgage rates dip for third straight week
| Date: 05/22/2008 |
Rates on 30-year fixed mortgages fell to an average of 5.98% according to a survey released Thursday by mortgage giant Freddie Mac. The drop marks the third consecutive week in which the average mortgage rate has dropped. This same time last year the average rate for a 30-year fixed loan was 6.37%. The Federal Reserve has steadily cut key interest rates for the past year in an effort to stabilize the current housing crisis. While fixed rate mortgage rates fell the average one-year adjustable rate mortgage rose from 5.18% to 5.24%. Freddie Mac vice president and chief economist Frank North attributed the fluctuation of interest rates "on news of both weaker industrial production in April and consumer sentiment falling in May to its lowest level since June 1980," adding "ARM rates, however, rose slightly on market forecasts that the Federal Reserve may not pursue any more rate cuts over the near term." Analysts don't expect another Federal Reserve rate change until the middle of next year. The low mortgage rates are expected to entice more home buyers into the troubled market. However, lenders and banks continue to raise standards which could preclude many people from buying. Good credit, sizable down-payments and well documented income are the keys to acquiring a loan in the current market. The combination makes it hard to stem the rising tide of foreclosure. A measure designed to help struggling homeowners avoid defaulting on their loans has been approved by an important Senate Committee this week. |
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