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Mortgage Rates Reach Record Low

Posted on Sep 29, 2011
Flickr / Diana Parkhouse (CC-BY)

U.S. mortgage rates on 30-year fixed loans have fallen to a record low after the Federal Reserve last week announced its plan to reduce borrowing costs by replacing short-term debt with more long-term debt.

The interest rates on 30-year mortgages, ending this week at a low average of 4.01 percent, have reached their lowest level since Freddie Mac began keeping such records in 1971. Rates for 15-year fixed loans also fell, from 3.29 percent last week to 3.28 percent this week. —BF

Bloomberg in the San Francisco Chronicle:

Record-low borrowing costs “are only a marginal support right now,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said in a telephone interview yesterday. “Mortgage credit is still tight and secondly, on the demand side, households are concerned about the job market and falling house prices.”

The S&P Case-Shiller index of home values in 20 U.S. cities decreased 4.1 percent in July from a year earlier, the group reported Sept. 27.

Purchases of new houses fell in August to a six-month low, Commerce Department data showed this week. Sales of previously owned homes that month rose to a five-month high, boosted by demand for lower-priced distressed properties, the National Association of Realtors said Sept. 21. The median price dropped to $168,300 from $177,300 in August 2010.

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By Bill, October 1, 2011 at 11:10 am Link to this comment
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This marginally helps those who are employed and can afford to make the mortgage the payments.

It does noting to deal with unemployment or those losing their homes because they cannot make payments on their mortgages, it does nothing to reduce the number who cannot afford health care insurance, it does nothing to reduce the number of children and americans living below the poverty line.

It’s a non-move and a non-story

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By PatrickHenry, September 30, 2011 at 2:06 am Link to this comment

Get rid of the compound interest.

Now that would be something.

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blogdog's avatar

By blogdog, September 29, 2011 at 4:05 pm Link to this comment

there is no idea here - they’re bereft of ideas - everyone’s desperate for
business - everything gets cheaper - but, lending rules for anyone other than
bankers are so strict that rates are only good for those with 2+ years of good
corporate salary to show - if your self-employed and struggling, forget it -
you’re stuck with whatever crappy deal you got till it breaks your back or your
business miraculously turns around

bankers have passed on a miniscule fraction of TARP to relieve small debtors -
small business lines of credit are still being mercilessly cut - pay a line down to
clear some headroom for a new project and before it can launch the bank cuts
the line down to within 10% of the new lowered debt

the banks are simply scared witless - all the major banks are on the verge of
blowing - they are zombie banks and they literally have no idea what they’re
doing and everyone’s out to cover their own asses - no leadership - no civic
virtue - they should all be deported to wherever their off-shore hedge fund is
housed and be shackled to it forever

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By Anarcissie, September 29, 2011 at 12:43 pm Link to this comment

Normally, reducing mortgage rates simply increases the price of real estate.  I suppose that’s the idea here.

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