May 24, 2008

Long-Term Rates Slip on Weak Economic

News Short-Term Rates Pick Up on Hints of the End to Rate Cuts.

Frank Nothaft, Freddie Mac vice president and chief economist. "ARM rates, however, rose slightly on market forecasts that the Federal Reserve (Fed) may not pursue any more rate cuts over the near term. For instance, the federal funds futures market suggests virtually no change in monetary policy over the next few months and the Fed viewed the last rate cut to be a "close call," according to the minutes of its most recent policy Committee meeting. "Housing woes still plague the economy. Although housing starts unexpectedly rose in April, all of the gains were in multifamily properties. New construction on one-unit homes fell to 692,000 homes (annualized), which was the least since January 1991 and almost 62 percent below the peak set in November 2005. In addition, homebuilder confidence matched an all-time record low in May."

30-year Fixed Rate Mortgage: Averaged 5.98 percent with an average 0.5 point for the week ending May 22, 2008. Last year at this time, the 30-year FRM averaged 6.37 percent.

15-year Fixed Rate Mortgage: Averaged 5.55 percent with an average 0.6 point.A year ago at this time, the 15-year FRM averaged 6.06 percent.

Five-year ARMs: Averaged 5.61 percent this week.A year ago, the 5-year ARM averaged 6.02 percent.

One-year ARMs: Averaged 5.24 percent this week. At this time last year, the 1-year ARM averaged 5.64 percent.

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Howard Bell
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