Tim McLaughlin, VP Weichert Financial Services
The 30 year Fixed Rate mortgage, continuing to test new lows, dropped below 4% last week for the first time in modern history to 3.99% with .68 points during the week ending Oct. 6, according to Freddie Mac’s weekly survey. A spokesman confirmed that the 30 year’s average of 4.01% with .66 points last week was previously the lowest the weekly rate has been. Freddie has been following rates since its startup in 1970.
While the week to week drop below 4% is only a matter of two basis points, it marks a benchmark level that could have more of a psychological impact on borrowers who qualify for new loans and have a rate high enough to benefit enough from a refinance.
A year ago at this time, the average weekly 30 year rate was 4.27% and the average 15 year rate was 3.72%.
Pew Research Center out of Washington conducted a survey of over 2,100 adults, of which 57% were current homeowners, 30% were renters, and 13% were prospective buyers, with some interesting results:
- 64% of homeowners whose homes lost value said they expect to recoup the equity losses in the next 3 to 5 years.
- 81% of homeowners (more than 4 out of 5) believe purchasing a home is the best investment an adult can make. By comparison, the number was at 84% back in 1991.
Fact & Fiction Regarding Your Credit Score…Did you know?
Fiction: Credit scores can change only once per month or every 30 days.
Fact: On the contrary; each creditor reports information to each credit bureau at different times of the month. This will cause the information and potentially the credit scores to change on a daily basis. For example, American Express may report to Experian on the 1st of the month, Equifax on the 15th and Transunion on the 25th. Thorough review of the credit report is needed to determine what caused the score to change from report to report
Secondary Market Takeaways:
On the heels of potential solutions for the European financial crisis and surprisingly positive employment data this morning (Nonfarm payrolls up 103K vs. projected up 60K, and last month revised to up 57K from an initially reported number of 0K), we have seen mortgage rates slowly increase this week from the historically low levels reported last week in the upper right hand column. If the positive economic and employment news is sustainable, we could continue to see rates increase in October vs. where interest rates are now pegged.