March 19th, 2009
Weekly Mortgage Roundup March 19
Mortgage rates fell this week, with the 30 Year fixed dropping to 4.98% from 5.03%. This is lowest level this year, and has the potential to drop even further with the Federal Reserve’s ongoing efforts to revive the housing market. They 15 Year fixed dropped to 4.61%, down from 4.64 from the week before. The 5 Year adjustable rate mortgage fell slightly from 4.99% to 4.98%. These rates also include an average of .7 points. These rate quotes were given before the Fed announced they were injecting $1.2 trillion into the economy by purchasing treasury bonds and other US debt.
I had stated earlier that I doubted mortgage rates would drop to 4.5% on a 30 Year fixed, and I cautiously still believe that rates won’t go that low. Lenders have not been quick to drastically lower their rates and are still dealing with the challenges of operating in today’s environment. These companies laid-off significant portions of their staff and are running a skeleton crew. In January of this year, rates fell significantly and mortgage applications flooded the lenders’ offices. What did they do? Lenders raised rates to discourage additional applications which allowed their staff to catch up on the backlog.
So yes, the mortgage rates may drop this week, but I don’t expect that to carry on for very long. If you are in a position to refinance your adjustable rate mortgage, you will need to get your paperwork going as quickly as possible to take advantage of these latest rate drops and lock your rate, but beware, they could disappear quickly.
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