As reported by CNNMoney.com, mortgage rates saw a decline recently, following the new administration’s statement last Tuesday regarding its bailout plan to rescue the ailing US economy. Bankrate.com released its data that shows different kinds of home mortgage rates’ fall.
The 30-year fixed home mortgage rate decreased from 5.70 percent to 5.34 percent in the week that ended on February 11. Meanwhile, the average 15-year fixed mortgage rate fell to 5.03 percent from 5.31 percent. Lastly, the jumbo 30-year fixed rate saw a decline from 7.12 percent to 6.98 percent.
This fall in home mortgage rates is seen to be brought about by the reaction of investors to the government’s bailout plan that was released on Tuesday. Most bought Treasury bonds and sold stocks. This lowered the yields and in turn caused a decline in mortgage rates. Senior financial analyst of Bankrate.com Greg McBride says that this trend will continue, as volatility in home mortgage rates increase. This is because the Treasury and the Fed are both working towards pushing rates lower.
This has caused homeowners refinance their home mortgage. Data from Freddie Mac shows more statistics supporting this trend. Its vice president and chief economist Frank Nothaft says that this is going to cause homeowners to refinance. Based on the current data and future predicted trends, homeowners will be able to save around $188 on a home mortgage worth $200,000.
Nothaft further added that the estimated weighted average of mortgage rate loans outstanding was around 6.2 percent in the fourth quarter of 2008, resulting to an increase in refinancing. Refinancing share among conventional home mortgage applications exceeded 50 percent in the past 11 weeks. Moreover it has averaged 80 percent over the period.
More trends and events are expected to happen in the financial world following the new government’s unveiling of its bailout plan on Tuesday. President Barack Obama, together with his cabinet, are optimistic about his plans of helping America, and the world, to come out of the global economic crisis even stronger than before.
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read articles about home mortgage information on FinancingAndMortgage.com - Home Mortgage Options for All of Your Needs.
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