The lower interest rates may stimulate a higher number of individuals applying for home loans.
Chicago, IL (PRWEB) July 11, 2015
Lenders like The Federal Savings Bank were surprised by the latest Primary Mortgage Market Survey released by Freddie Mac, a government-sponsored enterprise, for the week ending July 8. Rates decreased across the board and this may drive a higher number of first-time home buyers to apply for a home mortgage and enter the market.
Interest rates slide
The average 30-year fixed-rate mortgage decreased when compared on a week-over-week basis. This week's rate is also lower than the average seen a year ago at this time.
In addition, 15-year FRMs slid from the previous week as well as from last year.
Both 5-year Treasury-indexed hybrid adjustable-rate mortgages and 1-year Treasury-indexed ARMs fell lower than the averages seen a week ago as well as on a year-over-year basis.
Events abroad trigger lower interest rates
The financial situation in Greece led to lower rates in the states, noted Freddie Mac.
"Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China," noted Sean Becketti, Freddie Mac's chief economist. "Mortgage rates fell as well, although not by as much as government bond yields. Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases."
Applications have the potential to rise
The lower interest rates may stimulate a higher number of individuals applying for home loans. According to the Mortgage Bankers Association's weekly survey released on 7/8, the volume of applications jumped 4.6 percent on a week-over-week basis for the week ending July 3.
This trend may continue and ultimately lead to a stronger housing market with a higher number of individuals paying lower interest rates on their mortgages.
Contact the Federal Savings Bank, a veteran owned bank, to learn more about mortgages.