Rates at their lowest point since mid-1950's
Reno Gazette Journal - Friday, June 25, 2010
Alan Zibel
ASSOCIATED PRESS
WASHINGTON -- Mortgage gages are cheaper today than they've been in a half-century. If only most people had the job security, the credit score and the cash to qualify.
The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddi Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.
Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950's, when most long-term home loans lasted just 20 or 25 years.
Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in may after an enticing tax credit expired.
"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrates.com.
Rates have fallen over the past two months as investors have become nervous about Europe's debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall.
While morgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CD's especially are hard on people living on fixed incomes.
Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent.
RATES FALLING
SINKING RATES: Rates on 30-year-fixed mortgages fell this week to an overage of 4.69 percent, the lowest since the mid 1950s.
BUT DO YOU QUALIFY?: To get a new mortgage or to refinance, you need steady income, excellent credit and home equity or enough cash for a down payment.
REFINANCING LAGS: Refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent. Many people who wanted to refinance -- and qualified -- already have done so.
Source: Associated Press