Mortgage Applications Soar As Interest Rates Reach Record Lows
January 1st, 2009by Julie Dufault
Historically low interest rates are enticing prospective home buyers as well as homeowners interested in refinancing to take action, resulting in a record number of mortgage applications. According to a survey released December 31, 2008 by Freddie Mac, interest rates on U.S. 30-year fixed-rate mortgages have dropped for a ninth consecutive week, and have reached their lowest level in thirty seven years. Interest rates on the 30-year fixed rate mortgage are now at an average of 5.10 percent, which is the lowest rate for this type mortgage since Freddie Mac began the Primary Mortgage Market Survey in 1971.
Consumers are definitely paying attention to these falling rates. According to the Mortgage Bankers Association, mortgage applications surged in mid-December to levels not seen since July 2003, more than five years ago. The low rates currently available are an impetus for consumers who have been on the edge, waiting for some good news, to buy a home or to refinance their existing home.
The spike in mortgage applications has been a positive response to news in November that the Federal Reserve will spend near $600 billion buying mortgage securities backed by government sponsored entities like Fannie Mae, Freddie Mac and Ginnie Mae.
