Mortgage Rates Dip Below 5%

McLEAN, Va. – Oct. 2, 2009 – Rates on 30-year home loans dropped below 5 percent for the first time in four months, but still remained above this year’s record low, Freddie Mac said Thursday. The average rate on a 30-year fixed mortgage was 4.94 percent, down from 5.04 percent last week, Freddie Mac said. The last time the 30-year home loan averaged less than 5 percent was the week ending May 28, when it was 4.91 percent. Rates hit a record low of 4.78 percent hit in the spring, and remain appealing for people interested in buying a home or refinancing.

On Thursday, the National Association of Realtors said the number of signed sales contracts rose for the seventh straight month in August, as homebuyers rushed to take advantage of a tax credit for first-time owners that expires in November. “Low mortgage rates are helping to stabilize home sales,” said Frank Nothaft, Freddie Mac’s chief economist. But borrowers may want to consider the Federal Reserve’s announcement last week that it is slowing down a program intended to lower mortgage rates and boost the housing market. Analysts say mortgage rates should remain low for now but could eventually move higher, and homeowners who want to refinance mortgages shouldn’t delay.

The primary reason mortgage rates are destined to move up is the HUGE amount of money recently printed by the Fed which helped stabilize the declining economy and avoid a financial collapse. This money will eventually have to be pulled back out of the system, which will result in substantial increases in lending rates. The banks will have less money to lend which in turn will drive rates up.

On The PURTEE Team website, we have a great feature which allows a potential buyer to review competitive mortgage rates and even apply online! Mortgage Info