U.S. mortgage rates shrink to lowest point since mid-1950s

[depakid]

Source: AP

Mortgages are cheaper today than they've been in a half-century. If only most people had the job security, the credit score and the cash to qualify. The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.

Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years. Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in May after an enticing tax credit expired.

"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com. Rates have fallen over the past two months as investors have become nervous about Europe's debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall. Mortgage rates track those yields.

While mortgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CDs are especially hard on people who are living on fixed incomes and earning next to nothing on their money. Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent, according to the Mortgage Bankers Association.


Read more: http://www.oregonlive.com/business/index.ssf/2010/06/us_mortgage_rates_shrink_to_lo.html

[Steerpike]

1. This is soooo confusing

I get mail everyday asking me to refinance my house. I have a credit rating of 740 or thereabouts. When I went to Wells Fargo (my mortgage holder thru no fault of my own), to ask about refinancing my loan (which right now is 6%)...Wells Fargo says they are not interested in refinancing my house. I went to my original lender (Household Finance) and they are not interested either....so what the fuck...

[Demeter]

2. Keep Looking, If You Are Serious

The mortgage lenders don't get paid if they don't make loans. Someone will do it, just be sure you don't get taken.

[Steerpike]

4. Well

they are obviously making their cash somewhere else. If the two big boys on the block aren't willing to lend, who will I go to? I can keep looking (and admittedly your advice is sound), but there are not a whole lot of options up here. And, my VA loan, requires that it be a FRM...so that may be a prob for the vultures up here who still push ARM's.

[Demeter]

9. Tried any credit unions?

How about INGDirect, an electronic bank?

[kirby]

7. Well...

Your credit rating is independent of how much equity you have in your home. Is it a lack of equity that is making it hard to refinance?

[Gormy Cuss]

10. Mine was interested but wanted to charge two points plus fees for a competitive rate.

The payback period for that just didn't make sense. The big banks don't want us to refinance because it would lower their revenues. For the moment we're just paying more principal while we look for someone who does want our business.

eta: we have excellent credit and plenty of equity.

[Vinca]

3. My husband's business is related to real estate and mortgages

and we're struggling to keep out heads above water. Nothing is selling, hardly any refinances. Almost no business. Over the last 30 years we've seen ups and downs, but nothing like this.

[Gormy Cuss]

11. I have noticed an increase in sales in this area recently and slightly shorter time on the market.

Prices however are still falling.

[Mudoria]

5. Getting ready to refinance through my credit union

I definitely like this news.

[madrchsod]

6. my adjustable went from 5.75 to 3.25.....

the bank is making about 2% on my loan.if the country goes into a hyper inflation my loan top rate is 11%

[Robb]

8. I knew there were people like you out there

...but I've never "met" one. Kudos. :toast:

[madrchsod]

13. our banker(savings and loan) has worked with us on our difficulty paying the loan

we finally caught up and now current.our loan,insurance,and taxes are all included and the total is 250 less than the rental value.

our bank does not foreclose..they buy back the loan.

[TexasObserver]

12. Home sales have dropped by 40% since the new home tax credit ended.

The tax credit kept the fires going for the past year, as all buyers who could qualify got a home. Now, there's 40% fewer buyers, at a time of year when sales are usually good.

Real estate looks to be in trouble the remainder of the year and well into 2011.