Near Record-Low Mortgage Rates to Further Fuel Refinancing

Mortgage rates
Updated on May 27, 2010: The 30-year fixed rate mortgage continued its slide this week, averaging 4.78 percent, down from last week’s 4.84 percent and the lowest level since December. 
It is nearing the record low of Dec. 3, 2009: 4.71 percent. The 30-year fixed rate was at 4.91 percent one year ago.
Meanwhile, the 15-year fixed rate mortgage has already set a record low of 4.21 percent, a rate unseen since Freddie Mac began its weekly survey in 1991. The 15-year rate averaged 4.24 percent last week and 4.53 percent a year ago.
Falling rates on long-term mortgages is good news for home buyers, and provides hope for those in the industry bracing for an expected lull in sales activity following the April 30 expiration of tax incentives that offered as much as $8,000 to new homebuyers and $6,500 for repeat buyers.
The low rates are already fueling double-digit increases in loan applications for refinancing, according to mortgage bankers.
“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release. “The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6% and 14.8%, respectively.”
Recent data on home prices are somewhat discouraging, but there are indications slower declines in some regions and reversals in some cities.
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