Mortgage Rates Fall But For How Much Longer?

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Mortgage and Lending with The Federal Savings Bank/Lending in 50 states NMLS # 109616

Mortgage rates continued to edge lower this week due in part over fears of a slowing global economy along with a big decline in the U.S. Stock markets, which boosted Bond prices. Freddie Mac reports that the 30-year fixed-rate mortgage fell six basis points this week to 4.75% with an average 0.50 in points and fees added on top of that rate. Freddie Mac said that this week's decline in rates is a welcome relief to prospective homebuyers who have recently experienced rising rates and rising home prices.

Mortgage credit availability rose for the second straight month in November, reports the MBA. The MBA's Mortgage Credit Availability Index (MCAI) gained 1.1% to 188.8 in November after the 2.5% gain in October. A decline in the MCAI indicates that lending standards are tightening, while an increase signals they are loosening. The November number of 188.8 was the highest since early 2008, and was up 3.5% from a year ago.

The service sector of the U.S. economy produced positive gains in November and is the largest portion of the U.S. economy's business activity. The Institute for Supply Management (ISM) reported today that its ISM Service Index rose for the 106th consecutive month in November to 60.7 versus the 59 expected. Within the report, the two closely watched components, new orders and employment, both rose during the month. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates the non-manufacturing sector is generally contracting.

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