News Update :

Mortgage Rates Fall Again

Monday, May 28, 2012

Today could be the best time to buy a house - if you qualify. Prices are nearly 10 years in most markets hollow, and the rate at 30 years fixed rate mortgages are at their cheapest ever.
On the mortgage buyer Freddie Mac said the average rate on a 30 year loan fell to 3.78 percent, the lowest since long-term mortgages began in the 1950s.

The average for 15 years, fixed rate mortgage, a popular option for refinancing, remained unchanged at 3.04 percent, matching the record hit last week.
Lower rates are a major reason for the housing industry is showing early signs of a recovery five years after the bubble burst and the market collapsed.

Last month's sales of previously occupied two houses and new homes increased by almost two-year highs. Manufacturers are more confident, more homes on innovating and demanding more building permits for single family homes later this year.

A slight improvement in the labor market has also made people more open to buying a home. Employers have added a million jobs over the last five months.

But home sales in total are still well below normal. Economists say it could take years before the market is completely healed.

One big reason is that banks that were burned by the 2008 financial crisis are now much more cautious about lending money to prospective homebuyers.

Mortgage rates fell because they tend to follow the yield on the 10-year notes the Treasury. Uncertainty about how Europe will solve its debt crisis led investors to buy more Treasury securities, which are considered safe investments. As the demand for treasury bills increased, the yield decreases.

-The Associated Press also contributed to this report
Richard Davies Business Correspondent ABC NEWS Radio
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