Mortgage Rates Fall During Week

Mortgage Rates Fall During Week
This week there has been a number of huge factors contributing to the recent decline in mortgage rates. The Fed has lowered interest rates by 0.75 percent, JP Mortgage purchase Bear Sterns and Fannie Mae and Freddie Mac are pumping $200 billion into the housing industry.

The 30 year fixed rate mortgage average fell from 6.13 percent to 5.87 percent from a week earlier, while the 15 year fixed rate mortgage average fell from 5.60 percent to 5.27 percent during the same week according to Freddie Mac. This is the first time that mortgage rates have fallen since February of this year.

Headlines of the week which contributed to declining mortgage rates include the Federal Reserve slashing the Federal Fund interest rate by 0.75 percent. When the Feds slash interest rates it allows bank to borrow money from one another at a cheaper interest rate and also allows for banks and lenders to lend to consumers at a cheaper interest rate.

Also this week, JP Morgan Chase purchased Bear Sterns, the fifth largest investment bank, for $236.2 million which equates to just $2 a share. The purchase was approved on Sunday before the markets opened.

On Wednesday, mortgage giants Fannie Mae and Freddie Mac won government approval to pump $200 billion into the US housing market. The move is designed to free up credit and to allow lenders who sell mortgage loans to the mortgage giants to offer more home loans to American citizens.

This has been a good week for homeowners and homebuyers to take advantage of interest rates. The only question is, how long will it last?

Submitted by admin on 3/20/08