Mortgage Rates Unmoved

[Aug 1, 2007.]

Prospective homebuyers received some encouraging news recently, thanks to the fact that rates on 30-year mortgages stayed steady. The decision to maintain the status quo might have been surprising to some, given all the concerns being raised about inflation at this point in time.

The mortgage firm known as Freddie Mac noted that the 30-year fixed-rate mortgages remained at 6.73%. That's the same as the previous week's rate. The rate reached its highest point in mid-June, when it jumped to 6.74%.

Interestingly enough, inflation, considered at both the wholesale and the consumer levels, declined in June, according to government statistics released recently. The credit apparently belongs to a precipitous drop in gasoline prices. Yet, gas prices jumped again in July, raising fears of an upsurge in the inflation rate.

The chairman of the Federal Reserve, Ben Bernanke, has informed Congress that inflation remains a major concern.

Meanwhile, a chief economist at Freddie Mac stated, "In a week marked by stock indexes reaching new highs on Wall Street, mortgage rates lingered near the previous week's level as the latest economic indicators did not affect inflation expectations."

Federal Reserve policymakers at their June meeting stated that some core inflation readings had brightened. During the meeting, officials decided to hold interest rates steady—a situation which could continue through the beginning of next year.

Freddie Mac also reported that rates on 15-year fixed-rate mortgages, which are common in the refinancing industry, dropped slightly to 6.38%. There was also a slight drop in the one-year adjustable rate mortgages, which are now 5.71%. Meanwhile, 5-year adjustable-rate mortgages are unchanged.

Last year at this time, the 30-year mortgage rate was 6.80%, while the 15-year mortgage stood at 6.41%. In addition, the 5-year adjustable rate mortgage was 6.36%, with the 1-year adjustable rate mortgage standing at 5.80%.

Julie Ann Amos
August 1st 2007

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