Mortgage rates for homes today are very low, but U.S. borrowers have a very short memory. They forget that the rate on the 30-year fixed, which sits around 3.6 percent today, was a full percentage point higher a year ago, and above 5 percent in January of 2010. The purchasing power gained through today’s low rates have arguably helped fuel the recovery in home sales. Low rates have also sparked a boom in mortgage refinancing, which in turn has put more spending money in consumers’ pockets.
On the Mortgage Bankers Associations weekly report from a week ago, there was a 10 percent drop in refinance applications. On a 30-year fixed moved from 3.62 percent to 3.67 percent.
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