Nov 07 2008
US Mortgage rates drop
The results of a survey conducted by the US mortgage giant Freddie Mac has reported of a drop in the mortgage rates which surely has come as a breath of fresh air for the people desiring to buy a house in the otherwise bleak economic condition. According to this report the 30 year fixed rate mortgages have shown a slump in their rates from the previous 6.46 per cent reported last week to the present rate of 6.2 per cent. It is not this bracket alone which has witnessed this slump. The same downward trend has also been noticed in conjunction with the 15 year loans as well as the 5 year mortgages. In the case of the fixed 15 year mortgage which is a popular segment with the people interested in refinancing the interest rates have slipped down from the value of 6.19 per cent which was reported last week to the present day value of 5.88 per cent. In the case of the flexible rate five year mortgage the rate of interest fell to 6.19 per cent from the rate of 6. 36 per cent which was reported last week. Registering a similar fate was the category of the one year adjustable rate mortgage where the decline was measured to stabilize at 5.25 per cent as against the value of 5.38 per cent which was seen last week.
This drop in mortgage rates surely translates into very good news for all the aspiring home buyers who had put up their plans on hold considering the high interest rates. But these house buying plans are still finding it hard to materialize owing to the bad financial credit crunch prevalent in the market wherein the buyers find themselves in a situation where there are not enough banks or any financial institution willing to provide them with the needed finances to take on the mortgages. The previous hike in the mortgages had caused a serious dent in the US housing sector which went ahead to have a direct impact on the US economy and is largely responsible for the condition it is in today. Dipping home values have resulted in a decline in the spending capacity of consumers leading many towards foreclosures which had directly impacted the big financial institutions by making them suffer losses.