Mortgage rates at record low again

Written By Emdua on Kamis, 20 September 2012 | 07.34

Mortgage rates fell to a record low once again in the latest reading.

NEW YORK (CNNMoney) -- Mortgage rates fell to record low levels once again last week, as the Federal Reserve's decision to buy billions in home loans for the foreseeable future helped bring lending costs down for home buyers and owners.

Mortgage finance backer Freddie Mac's weekly survey of mortgage rates showed the average 30-year fixed-rate mortgage fell to 3.49% from 3.55% the previous week. That matched the previous record low set in July. The fixed-rate 15-year mortgage reached a new record low of 2.77%.

The Fed announced last Thursday that it would be buying $40 billion in mortgage-backed securities each month for the foreseeable future. The idea of the purchases, popularly know as QE3, is to spur economic activity buy pumping more cash into the economy and driving down rates. Those taking out new home loans, either to purchase or refinance, will be among the first beneficiaries of the policy.

Frank Nothaft, chief economist, Freddie Mac, said the lower rates should help the ongoing housing recovery.

The low rates in recent months, coupled with tighter inventories, has helped both home values and sales.

On Wednesday, the National Association of Realtors reported a 7.8% gain in sales of previously owned homes compared to a year earlier, while the Census Bureau reported that housing starts and building permits rose substantially in August. Other readings have reported that home prices are finally turning higher after years of steady decline.

But while the housing market is showing signs of improvement, prices and sales are still hurt by an excess inventory of foreclosed homes and continued jobs market weakness.

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First Published: September 20, 2012: 10:15 AM ET

20 Sep, 2012


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Source: http://rss.cnn.com/~r/rss/money_topstories/~3/d0pMSN5Vglg/index.html
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