14 Month Low For Mortgage Rates

With the high reached back on June 28th, (the benchmark at 6.93%,) mortgage rates have continually drifted lower since then and have hit the yearly low of 6.08%. The rate has fallen for the past six weeks and has been causing a firestorm in re-financing. This week, the rate fell by 9 basis points, ( a basis point is 1/100 of one percentage point.) The 30 year rate is now at its lowest point since 5 October, 2005. At that time, it was 6.07%.

The cooling off of the housing market, coupled with the belief that gas prices will increase have fuelled speculation that have pushed trades down. With the slowing of the economy and inflation being kept in check, hopefully that would be enough to cause the Fed to spark rate cuts.

The homeowners who have been on adjustable rate mortgages, have been the quickest to jump on the re-financing bandwagon, and more are expected as the fear increases that mortgage rates might start increasing because of the Bond Market news, (which often mimics mortgage rate trends,) that the 10–year treasury note has ended its downward trend.

Because of the slowing economy, it has brought more home buyers into the marketplace, as well as pushed the longer term rates to their lowest point in a year.