MORTGAGE RATES DOWN CONCERNS OVER LABOR MARKET

30-year fixed-rate mortgage: Averaged 5.20 percent with an average 0.7 point for the week ending July 9, 2009, down from last week when it averaged 5.32 percent. Last year at this time, the 30-year FRM averaged 6.37 percent.

15-year fixed-rate mortgage: Averaged 4.69 percent with an average 0.7 point, down from last week when it averaged 4.77 percent. A year ago at this time, the 15-year FRM averaged 5.91 percent.

Five-year Treasury-indexed hybrid ARMs: Averaged 4.82 percent this week, with an average 0.6 point, down from last week when it averaged 4.88 percent. A year ago, the 5-year ARM averaged 5.82 percent.

One-year Treasury-indexed ARMs: Averaged 4.82 percent this week with an average 0.6 point, down from last week when it averaged 4.94 percent. At this time last year, the 1-year ARM averaged 5.17 percent.

Freddie Sayz

Interest rates for 30-year fixed-rate mortgages fell for the second week in a row to the lowest level in six weeks amid market concerns over a weakening labor market, said Frank Nothaft, Feddie Mac vice president and chief economist. The economy lost 467,000 jobs in June, more than the market consensus, and the unemployment rate rose to 9.5 percent, the highest since August 1983. Moreover, hourly employee wages increased at an annual rate of 0.7 percent on average in the second quarter of 2009, the smallest gain since records began in 1964.

The weak employment situation coupled with falling home values is adding to greater defaults on home equity loans and lines of credit. The American Bankers Association reported that the number of home equity loans that were 30-days or more delinquent rose to a record high of 3.52 percent in the first quarter and home equity lines of credit also reached a record of 1.89 percent. For comparison sake, such loans totaled $1.1 trillion outstanding in the first quarter of 2009, representing nearly 10 percent of all home mortgage debt, according to the Federal Reserve Board

Thanks for Reading
Howard Bell

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