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Mortgage rates continue downward trend

July 26th, 2012 by John Eastman

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Average 30-year fixed mortgage rates dropped last week, falling below 3.5%.  That level has not been seen since 60 years go. Freddie Mac reported that the average rate on the 30-year loan dropped to 3.49% from 3.53% last week. Rates on 15-year fixed mortgages  dipped to 2.80%. That’s below last week’s previous record of 2.83%. Inexpensive and falling mortgage rates have helped fuel the housing recovery, although at times that recovery has been stymied due to other economic indicators, such as unemployment factors and low hiring rates of employers.

Referring to some average mortgage rates reveals a downward trend. National overnight averages as of July 26 were 3.55% for 30 yr fixed, 2.96% for 15 yr fixed, 5/1 Adjustable  Rate Mortgages (ARM)3.00%.  Regarding home equity rates, the average is 5.56% for a $30K home equity loan, 4.51% for a $30K HELOC.

The National Association of Realtors says its index of pending sales agreements fell 1.4% in June to 99.3. May’s reading was revised down to 100.7. To gauge that, a reading of 100 is considered healthy. The index is 9.5% higher than it was a year ago. The index bottomed at 75.88 in June 2010 after a homebuyers’ tax credit expired. Consistent contract signings provide a good indication of where the overall housing market is headed. The average lag between signed contract and a completed deal is one to two months.

The lower mortgage rates are generally a positive fuel for the economy, including refinancing existing homes. Available monies from refinancing often get used on discretional spending items as renovations, big ticket items as furniture, etc. which helps drives the economy.

Freddie Mac surveys lenders across the country on Monday through Wednesday each week and determines its national mortgage rate numbers.

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