Decreasing Mortgage Rates Favor Consumers

Decreasing Mortgage Rates Favor Consumers
Mortgage rates continue to decline as U.S. economic worries continue to mount. Freddie Mac reported that the 30 year fixed mortgage loans have fallen to their lowest point in over two years.

The mortgage rate on a 30 year fixed rate mortgage dropped 20 basis points over the last week to 5.87 percent, while during the same time, the 15 year fixed rate mortgage dropped 25 basis points to 5.43 percent.

Friday’s unemployment report showed the jobless rate jumping to 5 percent in December, up from 4.7 percent in November. The increase in unemployment is the largest one month increase since 2001 and the highest mark in two years. Many analysts tie the declining mortgage rates to the increasing unemployment rate.

The latest employment report paints a grim picture for the U.S. economy; an economy which many believe is headed towards a recession. With further rate cuts by the Federal Reserve and a possible economic stimulus package expected to be announced, the U.S. could still ward off a full blow recession.

As mortgage rates continue to drop, there has been an increase in homeowners looking to refinance their mortgages into a more attractive rate. The Federal Reserve meets again on next Tuesday to determine by how much, if any, rates should be cut.

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