(AP Photo/Paul Sakuma)
Uncertainty about the U.S. economy and debt problems in Europe are creating favorable mortgage rates for home buyers and those who want to refinance their current loan, according to the latest survey by Freddie Mac.
In the latest week, the average 30-year fixed mortgage rate fell from 4.75% to 4.69%, including 0.7 points, the lowest since Freddie Mac began keeping records back in 1971.
The average rate on a 15-year mortgage dipped from 4.20% to 4.13%, the lowest since Freddie Mac began tracking the 15-year mortgage in 1991.
General concerns about the economy have have put plenty of pressure on longer-term Treasury yields. And because mortgage rates closely track the 10-year benchmark bond, rates have fallen firmly below 5%.
Persistent fears that problems in Greece could spread through Europe have also contributed to falling rates as investors have been quick to trade the euro for the dollar and U.S. government bonds, though recent measures of risk indicate concerns have modestly subsided.
With the 30-year fixed rate holding below 5% for the seventh-consecutive week, there has been a renewed interest in refinancing among current homeowners; however, many who would love to lock in at rock bottom rates are being prevented by the lack of equity in their homes.
In the meantime, conventional wisdom dictates that the current environment for mortgage rates should be sparking considerable traffic for realtors; however, the just-expired tax credit moved some purchases forward, and the market is feeling the aftermath (see Sugar high for new home sales followed by crash).
Potential buyers are also worried about the direction of home prices, while job insecurities are keeping others on the sidelines.
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