Mortgage Rates Hold Steady While Homes Sales Tumble

A week filled with better than expected economic data kept mortgage rates fairly steady. Home sales continue their downward trend as lenders tighten up credit standards for homebuyers.

Freddie Mac released its Primary Mortgage Market Survey today showing the 30 year fixed and 5 year adjustable mortgage rates declined from the previous week. The average of the 30 year fixed rate mortgage is 6.05 percent, down 0.01 of a percent. The 5 year ARM rate averaged the week at 5.67 percent, down 0.06 of a percent.

The same survey shows 15 year fixed mortgage rates rising 0.01 percent to 5.60 percent and the one year adjustable rate mortgage, for the third week in a row, held steady at 5.29 percent. Mortgage rates held steady thanks to a strengthening conditions in the manufacturing and service industries as well as rising worker productivity and diminishing labor costs.

The Pending Home Sales Index fell by 1 percent in the month of March to 83.0. The level of the index is also down 20.1 percent from the March of 2007 reading of 103.9. The index for the Northeast territories rose 12.5 percent in March and was the only territory that showed a positive gain for the month.

The credit crunch is playing a major role in a slumping housing market. Richard F. Gaylord, President of NAR, stated “In many cases buyers are waiting for greater access to affordable credit, especially in higher cost areas, but some are disappointed with what appears to be unnecessarily restrictive lending requirements.”

Submitted by admin on 5/08/08
Source: Freddie Mac
NAR







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