Mortgage Rate on 30-Year Loan Falls to Record 4.19%
Mortgage Rate on 30-Year Loan Falls to Record 4.19%
Derick E. Hingle/Bloomberg
A six-month decline in mortgage rates has spurred a surge in refinancing while doing little to increase property demand as U.S. unemployment hovers near 10 percent.
A six-month decline in mortgage rates has spurred a surge in refinancing while doing little to increase property demand as U.S. unemployment hovers near 10 percent. Photographer: Derick E. Hingle/Bloomberg
Oct. 14 (Bloomberg) -- Gary Shilling, president of A. Gary Shilling & Co., talks about the U.S. housing market and economy. Shilling, speaking with Erik Schatzker on Bloomberg Television's "InsideTrack," also discusses the outlook for the U.S. dollar. (Source: Bloomberg)
U.S. mortgage rates fell for a third straight week to the lowest level on record, extending a slide in borrowing costs as housing demand slumps.
Rates for 30-year fixed loans declined to 4.19 percent in the week ended today from 4.27 percent, Freddie Mac said in a statement. It is the lowest rate since the McLean, Virginia- based company began tracking the data in 1971. The average 15- year rate tumbled to 3.62 percent from 3.72 percent.
A six-month decline in mortgage rates has spurred a surge in refinancing while doing little to increase property demand as U.S. unemployment hovers near 10 percent. Sales of existing homes were the second-lowest on record in August, the National Association of Realtors in Washington said Sept. 23.
“It takes an awful lot of confidence to make the decision to buy a house,” said Don Rissmiller, chief economist at Strategas Research Partners LLC in New York. “With the historically very high unemployment rate, the confidence hasn’t been there.”
The Mortgage Bankers Association’s applications index increased 15 percent in the week ended Oct. 8, the Washington- based group said yesterday. Refinancing jumped 21 percent, the most in four months. Purchase applications fell 8.5 percent.
“Mortgage rates have followed Treasury yields down,” said said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “I think the bottom line is they’ll stay low for quite some time.”
Treasury 30-year bonds today rose for the first time in five days before a $13 billion sale, the final of $66 billion in three note-and-bond auctions this week.
Foreclosure Sales
Sales of foreclosed properties accounted for almost a third of all U.S. transactions in September, a sign that a prolonged delay in repossessions may hurt the housing market, data vendor RealtyTrac Inc. said in a report today.
Bank of America Corp., the largest U.S. lender, said Oct. 8 it would freeze foreclosures across the country, while JPMorgan Chase & Co. has delayed seizures in 41 states and Ally Financial Inc. in 23 states.
To contact the reporter on this story: Danielle Kucera in New York at dkucera6@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at at kwetzel@bloomberg.net.
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