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Home Mortgage Rates Still Considered Low Despite Rise

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By : John Cutts    99 or more times read
The second week of June heralded an increase in home mortgage rates, although real estate analysts reported that the level is still near record lows. The increase in rates comes in the heel of news that an increase in the number of loan mortgage applications has also been recorded, a first in the past six weeks.

Despite the rise in the number of applications for mortgage loans, the housing market is expected to remain at an almost stand still since analysts are unwilling to use these figures to gauge the number of people who will buy or are planning to buy residential properties.

According to government-sponsored mortgage lender Freddie Mac, lenders are offering a 4.75% average mortgage rate this week to solid borrowers, or those deemed able to make regular payments, for a 30-year fixed loan. This rate is an improvement from the previous week’s 4.72% and from the December rate of 4.71% which was considered a record low.

Fifteen-year fixed mortgages are being offered at an average of 4.2%, a slight improvement from the previous 4.17% rate. For borrowers to receive the average home mortgage rates currently offered by most lenders, they are required to pay an average of 0.7% of the total loan amount upfront. Although rates are comparatively lower than the past few weeks, buyers are still not interested in purchasing homes after the tax credit window closed on April 30, analysts revealed.

This is despite a report from the Mortgage Bankers Association that seasonally adjusted applications for home purchase mortgage loans rose by 7.3% during the previous week. The increase though, is still almost 40% below the peak number for 2010 recorded during the end of April.

Majority of real estate analysts refused to draw a conclusion from the latest home mortgage rates and loan application figures. They stated that although purchase applications declined in May following the tax credit deadline, it is still difficult to predict whether the housing market is on a rebound or will remain on a slump for the rest of the year.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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