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Mortgage Rates on the Decrease

[Nov 16, 2007.]


Mortgage rates appear to be on the decline once again. The rates dropped to a nationwide average of 6.33% this week. That's down from 6.4% the previous week. The rates applied to 30-year, fixed-rate mortgages. The statistics come courtesy of Freddie Mac, the mortgage giant.

The decline meant that rates on 30-year, fixed-rate mortgages are at their lowest level since September 13th, when they clocked in at 6.31%. The September rate was the lowest percentage recorded since last May.

Economists stated that the decline appeared tied to expectations that the Federal Reserve will cut interest rates again by the end of the year. The Fed slashed a benchmark rate in September, raising hopes of a turnaround in the housing market. Unfortunately, though, that upturn has yet to materialize. At this point, forecasters are predicting that the housing market will not recover until at least the middle of 2008. As a result, the troubles within the housing sector could become an issue in the 2008 Presidential campaign.

The troubles within the housing market and the nationwide credit crunch threaten to catapult the economy into recession. Signs of a possible recession in the works have been increasing, although, thus far, recession has been kept at bay.

Officials at the Federal Reserve have said they are prepared to do whatever it takes to prevent the economy from going into recession and keep inflation under control. The pledge has helped to calm the fears of some consumers. However, consumer confidence remains a problem at this point. As a result, retailers are expecting sluggish sales this holiday season. Because of that, they are predicting that they will not be hiring as much temporary help as they did last year during the all-important Christmas rush.

Meanwhile, rates on 1-year, adjustable-rate mortgages have declined to 5.66% from 5.76% the previous week. Last year, the rate for 1-year, adjustable-rate mortgages was 5.6%. The rate for 30-year mortgages stood at 6.4% in 2006.

Julie Ann Amos
November 1st 2007

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