Archive for August, 2010

fixed mortgage rates remain at historical low levels heading into the month of August

By admin On August 1, 2010 No Comments

The mortgage market appears to be in great shape for consumers heading into August 2010. Fixed mortgage rates have edged up slightly over the past thirty days, but appear to be firmly entrenched in the mid four percent range for a thirty year fixed rate home loan. A recent report from Freddie Mac, the nations second largest agency lender reported fixed mortgage rates at 4.56%, the lowest level recorded in their tracking history. Mortgage interest rates began to drop in late June and followed through on this move into the early part of July as the DOW moved lower with investors pulling money of the stock market and looking for a safe haven in the bond market. The net result was a decline in fixed mortgage rates by nearly .25% over this period of time.

The month of August is a key month for the housing industry as it likely represents one of the remaining strong home buying months of the year, before the school season begins in the fall. To date, low mortgage interest rates have not had a strong impact on helping to boost home sales, which fell sharply following the elimination of the governments homebuyer tax credit in April. A better than expected resale home report from June of this year, released a few weeks ago may be one of the first indication that borrowers are taking advantage of low rate financing to help drive home sales.

The mortgage market has benefited from the perceived “second dip” in the economy and the potential of a much longer recovery that economists were predicting earlier this year. The FOMC will be holding a meeting in August where they will shed further light on their monetary policy for the balance of 2010 as well as discuss their support for the secondary mortgage marketplace, a key supplement to keeping fixed mortgage rates at historically low levels. The non farm payroll report due out on Friday the 6th will set the tone for the stock market and bond market this month, and will be a key factor in determining whether mortgage rates will remain at historically low levels for August. Most experts are predicting another decline in payroll numbers so any improvement in hiring trends could quickly lead to a sharp increase in bond yields and drive up fixed mortgage interest rates.

Best Rate Source helps provide consumers with updated market information in an effort to help consumers lock in the lowest mortgage rates with the best lenders. Since 2008, Best Rate Source has been a leading destination for consumers searching for market news and loan information to help find the best financing options for their unique situation.

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