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Wednesday, February 16, 2011

.U.S. Mortgage Demand Falls to Two-Year Low as Refinancing Drops

The 30-year fix mortgage is around 5%.  If this drop has occurred at 5%, what happens at 6% or even 7%?

Rising interest rates may dampen any potential housing recovery,” Scott Buchta, head of investment strategy at Braver Stern Securities LLC in Chicago, said before the report. “The recent rise in mortgage rates has also made it uneconomical for the majority of homeowners to refinance their mortgages.”
The average rate on a 30-year fixed loan fell to 5.12 percent from 5.13 percent the prior week. The rate reached 4.21 percent in October, the lowest since the group’s records began in 1990.
At the current 30-year rate, monthly payments for each $100,000 of a loan would be $544, or about $11 more than the same week the prior year, when the rate was 4.95 percent.
The average rate on a 15-year fixed mortgage rose to 4.34 percent from 4.29 percent.
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