Mortgage Rates Plunge To Lowest Levels Since 1960s
STEVE INSKEEP, host:
Now, let's talk about one of the numbers that shapes the economy in this country. Mortgage rates keep going lower. Theyve been below 5 percent for weeks, and now they are at all-time record lows.
NPR's Joshua Brockman reports.
JOSHUA BROCKMAN: The average rate for a 30-year fixed rate mortgage is 4.7 percent, according to the weekly survey by Freddie Mac, the mortgage giant. The rate for the same period last year was nearly five and a half percent. And even 15-year mortgages are down. They slipped to 4.1 percent. These are the lowest level since officials started keeping records in the mid-1960s.
Freddie Mac economist Amy Crews Cutts says interest rates have been on a downward path in recent months.
Ms. AMY CREWS CUTTS (Economist, Freddie Mac): Especially with the worldwide capital markets in disarray, there's a big flight to quality to the U.S. investments. That includes, treasury securities and mortgage rates have just followed that demand right on down.
BROCKMAN: Freddie Mac projects rates will stay low through the end of the year, probably below five and a quarter percent. But some realtors, like Brett Ellis with RE/MAX in Fort Myers, Florida, say potential homebuyers are recognizing the opportunities in this market.
Mr. BRETT ELLIS (Realtor, RE/MAX): Weve got record-low prices, weve got record-low interest rates, and it's actually a perfect storm for buyers to buy right now.
BROCKMAN: Yet, mortgage applications have declined. That's according to the latest weekly survey by the Mortgage Bankers Association. Part of the drop is due to the expiration of a federal home buyer's tax credit. But economists say that the unemployment rate is the real drag on the housing market. New reports out this week confirmed home sales declined in May.
Joshua Brockman, NPR News, Washington.
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