After several month of continued escalation, mortgage rates have declined. Those who were kicking themselves for missing an opportunity of getting the lowest mortgage rates in decades, once again stand a chance as the current reported rate for a 30-year fixed mortgage has decreased to 5.12% (down from 5.29%).
Mortgage giant, Freddie Mac released the information in a statement earlier today. Although on the surface the number may seem insignificant according to Freddie Mac, if a homeowner refinanced their 1-year old $400,000 mortgage today, the savings would result in about $344 a month. That comparison was made to the average mortgage rate of this time last year which was 6.47%.
This "good for consumer" news was initially fueled by the Federal Reserves actions of buying bonds backed by home loans as a way to lower mortgage rates to jump start the economy. In March 2009, the program spending increased to $1.25 million and focused their efforts on lending giants Fannie Mae, Freddie Mac and Ginnie Mae. The program offered security to the lenders and provided them the ability reduce rates on new loans.
When the first affects of the plan took place in April of 2009, many homeowners were able to refinance at rates below the 5% mark. After the historic lows, the rates started to creep up which made investors concerned about inflation.
What are your thoughts about about the decreased in Mortgage Rates?
