Mortgage Rates Still Falling
Government-run mortgage backer Freddie Mac reported Thursday that mortgage rates fell to their lowest level since the agency has been tracking them this week after the Federal Reserve altered its monetary policy to keep long-term interest rates low. The average rate for a 30-year, fixed-rate mortgage, according to Freddie's survey, was 4.01 percent, down from 4.09 percent a week ago. The average for the 15 year fixed loan fell, as well, from 3.29 percent to 3.28.
The mortgage rates have fallen as a result of ultra-low yields on the 10-year Treasury note, which is generally used as a benchmark for long-term consumer loans. The average yield for the 10-year fell to its lowest level in fifty year after the Fed launched Operation Twist, a program that will replace short-term bonds with long-term ones in the central bank's portfolio. The Fed also said it would support the nation's beleaguered housing market by reinvesting maturing housing debt into mortgage-backed securities.
Analysts across the nation are predicting that mortgage rates will continue to set new record-lows in the weeks to come, as they have not fully responded yet to the decline in the 10-year Treasury yield. The lower rates, analysts hope, will continue to drive homeowners to seek refinancing for their outstanding debts, creating much-needed activity in the lending business.
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