Mortgage Interest Rates Continue to Drop
Rates on 30-year mortgages averaged 4.84% last week, according to the analysts at Freddie Mac. This is the lowest level this year, and near the lowest rates since the 1960’s.
This has come as a surprise to many observers, who had expected rates to begin rising with the end of the Federal Reserve’s mortgage-securities purchase program. The expectation was that rates would rise, once the Fed stopped bailing out the market.
But… the tumultuous financial situation in Europe has provided unanticipated relief for American homebuyers. The reason: international investors are pulling money out of Europe and sending it to what they see as the relative safety of the U.S. bond market. This, in turn, is driving down mortgage yields.