Mortgage News
Financial Services Industry

Interest Rates Finally Stay Put?

March 17, 2009 - The long slide of interest rates downward may be halted by the recent surge in refinancing, and may stay between an average of 5% to 5.25% for the next few months.
Benchmark mortgage rates have fallen nearly a full percentage point since late November, a historical low and a sharp drop from last year's levels. But some analysts contend rates must fall closer to the 4.5% level to ease U.S. housing woes.

Keeping rates from falling consistently below the 5% mark is the jump in refinancing this year. Homeowners have rushed to take advantage of low rates. The Mortgage Bankers Association reported this week that the volume of mortgage applications filed last week rose a seasonally adjusted 21.2% over the previous week. This major boost was driven by filings to refinance existing home loans, which increased 29.6%. New home mortgage applications only rose 1.5%.

The current state of interest rate affairs began last year as the Federal Reserve deliberately made a succession of cuts to stimulate a floundering sector. Ultimately, the central bank cut the short-term interest rate all the way to zero. Today's long-term rates are influenced by these cuts, but also external factors such as consumer demand and lender decisions.

Analysts say these rates will hover around these levels for some time. In addition to the surge in refinancing , which discourages lenders from slashing rates further, rates on mortgage-backed securities are still falling. The Fed has been buying these pooled mortgages in an effort to drive down rates, and it's worked, but not necessarily for borrowers. Rates on these securities are still falling and to a greater degree than consumer rates, meaning homebuyers aren't getting all the benefit.

Other real estate news shows uncertainty shrouding the market in other ways. U.S. housing starts surged 22% in February, on the strength of an 82% increase in construction of apartment buildings, the Commerce Department estimated this week. It was the largest percentage gain in 19 years, and the first increase in eight months.

But analysts cautioned that monthly housing start data can be volatile and subject to weather-related flukes. Plus, perspective shows the persistence of tough times in the housing sector: Housing starts are down 47% from a year ago, and 74% from the peak in early 2006. Inventories of unsold homes are wide, and increasing everyday with foreclosed homes. Homebuilder mood, reported by the National Association of Home Builders, is stuck at a 9 on a scale of 1 to 100.

Building permit data is more reliable, and showed a 3% gain in February. Permits for single-family units rose 11%, the largest percentage gain in 18 years.


For Further Reading:


Refinance at Today's Low Rates!



Follow the link to continue reading the related articles.

Response to Crisis Results in Record Low Mortgage Rates

Loan Modification 101

Lost in Translation: What Does the Fannie and Freddie News Mean for You?



Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state

Get the Updated and Improved Mortgage Rates App from

iPad for Mortgage Rates

Refinancing: Getting Started

Refinancing Info and Advice

Refinancing: Selecting a Loan

FREE Mortgage Rate Widgets
Your State's Rates or National Rates
Get this Widget for any State you want