Low Mortgage Rates Sparks Refinances and Home Sales

Low Mortgage Rates Sparks Refinances and Home Sales

Mortgage rates moved even lower this week, helped by economic weakness and recent actions by the Fed and the Treasury. Conforming fixed-rate mortgage rates dropped to levels last seen in 2003. According to Freddie Mac, the weekly decline in rates was the largest since 1981, over its Wednesday to Wednesday measurement period. Mortgage applications for both refinances and purchases where up measurably. Now may be the right time for you to examine purchasing or refinancing. Contact us for a consultation.

The Fed and the Treasury are looking at additional programs to boost the economy. On Wednesday, the Treasury confirmed that it is considering a plan which would offer below-market mortgage rates for select loans used to purchase homes. The lower rates would not be available for refinancing loans. At this point, it's not certain if, when, or in what form this latest idea will be acted upon. As we have seen recently, most notably with the $700 billion TARP rescue plan, government programs often change significantly before their implementation.
On the economic front, the November Employment data was even worse than expected. The economy suffered the largest monthly loss of jobs since 1974. In addition, the figures from October and September were revised sharply lower. The Unemployment Rate rose from 6.5% to 6.7%, the highest level since October 1993. The manufacturing and construction sectors continued to shed jobs, and the service sector was hit hard as well. The weak report makes additional fiscal stimulus programs more likely.