Mortgage Rates Decline to New 2010 Lows – 4.78%
May 27, 2010 at 13:52 UTC || By Forex Playmaker
The decline in US mortgage rates continued this week, fueled by growing demand for US government securities amid broad aversion to riskier assets.
The average rate on a 30-year fixed mortgage declined to 4.78 percent from 4.84 percent a week earlier. The loans are now priced at their lowest levels since December 2009, when 30-year mortgages went for 4.71 percent.
The ongoing decline in mortgage rates reflects continued uncertainty as to the health of the global economy. Fears of a global slowdown has prompted investors to pour money into US Treasuries, which has effectively depressed key rates in the U.S..
Demand for refinancing, meanwhile, is expected to pick up as a result of the declines, as homeowners attempt to lower their mortgage costs. However, credit remains heavily strained in the U.S., especially on the consumer-side, which is problematic for both homeowners and the broader economy. Going forward, recent strains in the credit markets, if unabated, will prove a major obstacle to growth for both the US and global economies.
