The Home Buyer's Korner

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April 23rd, 2015

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Average Mortgage Rates for April 23rd, 2015


After receiving a lot of data last week on housing for the month of March, mortgage interest rates maintain stable despite sluggish growth, but if things don’t change soon I think we’ll see a flight to safety by many foreign investors and drive down interest rates.  

The data last week pointed to overall slow economic growth; results that aren’t helping Main Street and American’s have been hit again this year by a harsh winter season. Not to mention an increasing strong U.S. Dollar and timid global growth throughout the first quarter of 2015.

The European Central Bank last year introduced measures to spur its economy. Fed members at it latest meeting mentioned these measures aimed at stimulating growth and spurring inflation in Europe as a measure of hope and others noted that such actions would strengthened the outlook for growth abroad. Measure which would create a weaker U.S. Dollar, bolster exports and create jobs. Today, neither opinion appears to be working, if not completely debunked.

Tumbling interest rates in Europe have put some banks in an inconceivable position: owing money on loans to borrowers. At least one Spanish bank, Bankinter SA, the country’s seventh-largest lender by market value, has been paying some customers interest on mortgages by deducting that amount from the principal the borrower owes. The problem is just one of many challenges caused by interest rates falling below zero all over Europe and what the Fed’s here in the U.S. had been hanging their hats on. Europe’s economy hasn’t improved yet, which only strengthen the U.S Dollar and that makes if more desirable for U.S. Business to import versus creating jobs here at home that would immediately help Main Street.

Winston Churchill once said, “Americans will do the right thing after they’ve done everything else”. Well, let’s hope America is finally ready to do the right thing. Hollywood East for political reasons hasn’t wanted to invest in American and in light of what is happening globally, it fair to assume rates are going to fall further on this side of the pond.

I expect foreign investors to begin purchasing U.S. Treasuries as a tool to shelter their wealth while nations flounder, which in turn will drive down short-term loans and mortgage rates. In doing so, it will create the perfect storm where Hollywood East could borrower at ultra-low rates and invest in building projects sorely needed all over the country and bolster our economy from within.

It will be interesting to see if our plutocrats are willing to do the right thing in the coming months and salvage the little growth Main Street has seen or will they continue to only keep their eyes on the need of Wall Street?

Freddie Mac reported in its weekly mortgage interest rate survey minimal changes in interest rates.

According to the agency, it revealed the average 30 and 15-year fixed-rate mortgages both fell two basis points this week to 3.65 and 2.92 percent respectively. Discount point rose for the 30-year term from 0.6 to 0.7 points, while the 15-year fell from 0.6 to 0.5 points.  The average 5/1 adjustable-rate mortgage rose one basis point to 2.84 percent, while the discount point fell from 0.5 to 0.4 and the 1 year adjustable-rate also fell two basis points to 2.44 percent with its discount remaining the same at 0.4 points.

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