24-30 May 2009 Interest Rate Information Milwaukee Area

Source: Real Estate Section Milwaukee Journal Sentinel 24 May 2009

Low interest sparks refinancings

Mortgage rates hover below 5%

AP-Washington- Rates on 30-year mortgages inched downward last week, remaining below 5% for the tenth-consecutive week and just above record lows. Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year, fixed-rate mortgages dipped slightly to 4.82% last week, down from an average of 4.86% the week before. The all-time low of 4.78 was recorded on the weeks of April 2 and April 30. Freddie Mac’s survey dates back to 1971. Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said Wednesday its index of application volume climbed 2.3% last week from a week earlier. Applications to refinance existing loans made up nearly 75% of all applications. To revive the economy, mired in the worst slump in decades, the Federal Reserve has cut its key interest rate to a record low near zero and is expected to hold it there well into next year. The Fed also has turned to unconventional tools to lower long term interest rates and spur spending, which would help bolster economic activity. The Fed at its meeting in March launched a bold $1.2 trillion economic-revival effort. It agreed to start buying up to $300 billion worth of government debt over the next six months and to boost purchases of mortgage securities and debt from Fannie Mae and Freddie Mac. At the April meeting, some Fed policy-makers said additional purchases “might well be warranted at some point to spur a more rapid pace of recovery,” According to documents released Wednesday.   Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a give day. The average rate on a 15-year, fixed-rate mortgage fell to 4.5% this week from 4.52% last week, according to Freddie Mac. Rates on five-year, adjustable-rate mortgages dropped to 4.79% from 4.82% last week. Rates on one-year, adjustable-rate mortgages rose to 4.82% up from 4.71%. The rates do not include add-on fees known as points. The nation-wide fee averaged 0.7 point last week for 30-year and 15-year mortgages and averaged 0.6 point for five-year and one-year adjustable rate loans. Milwaukee-area borrowers generally prefer not to pay up front points and as a result receive slightly higher interest rates.