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30-Year Mortgage Rates Record Significant Decline

[Oct 1, 2007.]


30-year mortgage rates have plummeted to their lowest point since the spring. As a result, homeowners hoping to refinance may finally be able to catch a break on their rates.

The mortgage giant known as Freddie Mac is reporting that the rate for 30-year, fixed-rate mortgages stands at 6.31%. That's the lowest rate recorded since May. At that time, the 30-year mortgage rate was 6.21%. Just last week, the rate stood at 6.46%.

Interestingly enough, Freddie Mac reported declines in mortgage products across the board. As a result, individuals with adjustable rate loans may find that their new rates are not as bad as they had anticipated. Over the next year and a half, some 2 million adjustable rate loans are expected to be reset. This has led to concerns that the foreclosure rate, which is already startlingly high, could skyrocket.

Meanwhile, the White House is asking lenders to offer as much help as possible to homeowners hoping to avoid foreclosure through refinancing. The housing market is not expected to recover from the subprime loan crisis until well into 2008—which may be too late for those homeowners who have already found themselves falling behind on their mortgage payments.

The Federal Reserve may opt to slice a key interest rate next week in an effort to protect the overall economy from the troubles within the housing market and in the stock market.

Meanwhile, the refinancing rate on 15-year fixed-rate mortgages stood at 5.97% this week—a noticeable improvement from the 6.15% rate the previous week. The 5-year adjustable rate is down to 6.17%, while the 1-year adjustable rate is down to 5.66%.

Last year at this time, rates for 30-year, 15-year, 5-year, and 1-year mortgages were all higher. Still, the subprime loan market continues to be a concern, with some companies being forced out of the loan business altogether because of a tidal wave of defaults on subprime personal loans.

Julie Ann Amos
October 1st 2007

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