The latest Freddie Mac survey shows that interest rates on both long and short term mortgages are falling. For the week ending August 24, the 30-year fixed-rate mortgage was 6.48 percent on average, with about 0.4 point, down from the previous week's average of 6.52 percent. Five-year ARMs fell to 6.14 percent, with an average 0.5 point, from the previous week's rate of 6.18 percent. One-year ARMs were your best buy at an average of 5.60 percent this week, and an average 0.7 point, which was down from 5.65 percent.
The Fed is still keeping a close eye on the housing market, according to leading economists. The hope is that the US can avoid a bursting housing bubble, and instead have a soft landing. Some analysts think the Fed will stop raising short term interest rates and hold the line. This takes some pressure off of mortgage rates, and allows lenders some breathing space.
Want some interesting information? Although housing sales are falling, 2006 should still be the third highest year for total sales, since records have been kept.
Michael
