According to information provided by Freddie Mac, current mortgage rates are not following the forecasts by industry experts that called for higher rates in 2010.
15 year fixed mortgage rates are in the 4.25% range, their lowest point since April of 1991. 30 year fixed interest rates have been averaging around 4.8%, still at the one of its lowest points historically. One year adjustable mortgage rates have dropped to their lowest point this year. 5 year adjustable loan rates have also remained steady.
Mortgage rates are holding at historic levels still. In fact, rates on 15 year fixed-rate mortgages recently set another record low rates. Mortgage credit conditions are also improving. Homeowners who were up to date on their mortgage payments outnumbered borrowers who were defaulting on home loans.
Economists had expected mortgage interest rates to rise in 2010, beginning with the Federal Reserve’s completion of $1.25 trillion mortgage-backed security purchase program. However, since then mortgage interest rates continue to remain low. Between the months of March and May, 30 year fixed mortgage rates have gone down a full 0.2% and 15 year fixed rate mortgages have gone down 0.14%.
What is Keeping Mortgage Rates Low?
Some mortgage industry professionals are concerned that these rate drops may not necessarily be a good sign for our economy. They think that mortgage rates are not increasing because the European economic crisis is pushing investors to more reliable U.S. mortgage investments, which can keep rates low.
It’s worth noting that mortgage rate declines in the past have proven fleeting, with rates moving higher after potentially permanent economic solutions have been identified.
While these low rates are good news for buying a home or refinancing, it’s also worth noting that not all mortgage borrowers have equal opportunity to take advantage of these low rates. In order to actually get the lowest mortgage rates available, borrowers typically will need a credit score of at least 720 and a significant down payment for a home purchase, or sufficient home equity to refinance.
Written by R. Smith: Mortgage Refinance, Compare Mortgage Quotes, New Homes San Diego
