Mortgage rates at lowest point since mid-1950s - If you are going to Refinance or Purchase - Now is a great time!!

The are the best Mortgage Rates we have ever seen. These rates are low belcasue of all of the Economic Stimulus and Economic Uncertainty. People are rsuhing to security to buy Bonds - This is driveing rates down.

Mortgages are cheaper today than they've been in a half-century. If only most people had the job security, the credit score and the cash to qualify.

The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.

Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.

Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in May after an enticing tax credit expired.

"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com.

Rates have fallen over the past two months as investors have become nervous about Europe's debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall. Mortgage rates track those yields.

While mortgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CDs are especially hard on people who are living on fixed incomes and earning next to nothing on their money.

Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent, according to the Mortgage Bankers Association.

Besides, many people who want to refinance — and are able to — have already done it, said Michael Fratantoni, vice president of research and economics at the trade group. And refinancing costs can total several thousand dollars.

"Rates haven't dropped low enough to justify a second refinancing," Fratantoni said. "The group of people who could potentially benefit is much smaller than it was 15 months ago."

Another factor: Many Americans owe more on their mortgages than their homes are worth and can't refinance through the usual channels. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home's value and have their loans guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March — a small fraction of the estimated 15 million homeowners who are "underwater" on their mortgages. And in Nevada and Florida, where home prices have fallen 50 percent or more from their highs, neither record-low rates nor government help can rescue homeowners.

"It's not the desire to refinance. It's the ability to refinance," said Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando, Fla.

Refinancing is generally considered worthwhile for homeowners who can shave at least three-quarters of a percentage point off the rates they pay now and plan to stay in their homes for a long time.

Besides the fees for the mortgage broker or lender, there are fees for title insurance, a new appraisal, document processing and other charges. And in "no fee" mortgages, costs are often added to the loan amount or the interest rate is higher.

To figure the national average, Freddie Mac collects mortgage rates each Monday through Wednesday from lenders around the country. Rates often fluctuate, even within a given day.

Rates on 15-year fixed-rate mortgages fell to an average of 4.13 percent. That was the lowest since at least 1991 and down from 4.2 percent a week earlier.

Rates on five-year adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac's records, which date to January 2005 for those loans.

Mortgage rates hit new low - 4.5% 30 Year Fixed Rate

If you are going to Refinance or Purchase a New Home - Mortgage rates hit a record low this week.

These are the Lowest Rates I have ever seen.  

Today the news is reporting Homes Sales are up in April. This is good news! 

However in order to properly evaluate this information you will need to know all of the details.

Yes. Home sales have increased year over year from last April. However as compared to what?

Last April was dismal according to historic standards. Yes. there have been more buyers entering the market. However how much of this was stimulated by Government Incentives - Tax Breaks and Discount Housing prices? Low Rates have also helped to stimulate this latest buying spree. Now the question is: With the Tax incentives and Government programs going away - Will the Buyers go away also? Has the Housing Market finally stabilized? It is too soon to tell. There are still more and more people going late on their Mortgage Payments. Right now it stands at about 10% of all homeowners are least 30 days late on their mortgage payment. In addition there are more and more defaults being filed every day. Many of these are what are know as "Strategic  Defaults. Meaning the Homeowner has made a calculated decision to stop paying the Mortgage because the house value is " underwater " - approx 25% of all defaults are now Strategic - The homeowners are simply walking away - or not making payments because the likelihood of their home regaining value anytime soon is low. With all fo these late payments and strategic defaults there will be more foreclosures and more Bank Owned Properties. The Banks currently have so many defaults and homes they have taken back due to foreclosure that they do not release them into the Marketplace. This is called " Shadow:" inventory. If the Banks were to reveal all of their defaults and list all of their properties the fragile Real Estate Marketplace would implode. Causing further deterioration of home values. They hold these properties back and release them slowly in order to try and create a market fueled by supply and demand. In addition many times Banks are letting homeowners stay in their property in order to maintain the asset. Protect the house - cut the lawn - water the grass etc... If they kicked everyone out and listed every property the market would drop another 25% at least.

Tax credit and low mortgage rates boost home sales

Homebuyers rush to take advantage of tax credits and low mortgage rates in April

WASHINGTON (AP) -- Homebuyers rushed to take advantage of government incentives and low mortgage rates in April, giving the housing market its biggest boost in five months.

Mortgage Rates are great!! Rates keep getting better. With the sell-off in equities and global economic uncertainty there has been a flight from risk to security. What does this mean? This means that Wall Street and European Markets are in a panic and investors are selling their stocks. When investors, institutions etc... sell stock they often move their money to investments that are considered safer. US Treasuries have been considered a safe haven for years. Bonds are a conservative investment with calculated returns. When there is considerable Bond activity -more buyers than sellers; than the laws of supply and demand take over and the yield on the Bond drops. The Bond yield continues to drop as buyers flood into this marketplace. Mortgage Backed Securities or MBS yields and returns are closely associated with the yields on 10 Year Treasuries. As this yield drops - then Mortgage Rates tend to follow. At one time there was a closer correlation with the Bond Market. Retail mortgage rates used to be 1% point higher than the yield on the 10 yr Bond. However in recent years this exact ratio has begun to spread wider.

Recently US Treasuries have come under scrutiny due to America's debt problems. If investors start selling Bonds because they question the security of the investment - then the yield will raise and so will Mortgage Rates.

Mortgage Rates Decline

Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%

The financial turmoil in Europe is providing an unexpected windfall for American home buyers, as international money seeking a safe haven is flowing into the U.S., pushing domestic mortgage rates to the lowest levels of the year and back near 50-year lows.

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A real estate agent leaves an open house for a home for sale in San Francisco. Falling mortgage rates could lift the U.S. housing market.

The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve's $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market.

Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.

Refinance business "exploded" last week, says Jeff Lazerson, chief executive of Mortgage Grader, a brokerage in Laguna Niguel, Calif. "It's schizophrenic. We all had this expectation of higher interest rates and no more refinances." He says he helped a borrower lock in a 30-year loan with a 4.25% fixed rate last week, the lowest in his 24 years in the business.

Rates on 30-year mortgages averaged 4.84% last week, according to a survey by mortgage-insurance titan Freddie Mac. Rates were quoted late Friday at 4.86%, the lowest since December 2009, according to a survey by financial publisher HSH Associates, and down from a high of 5.27% for the week ended April 9. Rates on 15-year mortgages averaged 4.24% last week—the lowest since Freddie began its survey in 1991.

Economists largely attribute the decline in mortgage rates to the European debt crisis and new concerns about the global economy, which unleashed a massive wave of cash into U.S. bonds from investors around the world.

This buying pushed down yields on Treasury bonds. Because mortgage rates are closely pegged to yields on 10-year Treasury notes, which fell to 3.2% Friday, the decline in Treasurys pulled down mortgage yields. Typically, mortgage yields remain around 1.5 percentage points above yields on 10-year Treasury notes.

Falling mortgage rates can give a powerful lift to the housing market. A general rule of thumb holds that every one percentage point decline in mortgage rates is the equivalent of roughly a 10% reduction in the home price for the buyer. So, if the current rates hold, say economists, that could help stabilize prices and allow current homeowners to sell existing homes without substantial price cuts.

It isn't clear how much home-buying the lower rates will spur. Demand had fallen in recent weeks after buyers raced to close sales ahead of last month's expiration of an $8,000 federal tax credit for home purchases. Applications for new-purchase loans hit a 13-year low in the week ending May 14, according to the Mortgage Bankers Association.

Borrowers do face roadblocks. Underwriting standards are their strictest in a decade, and record numbers of borrowers are "underwater," owing more to the bank than their homes are worth. That has excluded large swaths of borrowers from getting loans at the new lower rates.

Still, lower rates could widen the pool of people who qualify for a mortgage, while others may find they qualify for a slightly larger loan. "They can buy the place with the extra bedroom or the swimming pool," says Jay Brinkmann, chief economist at the Mortgage Bankers Association.

Falling rates have encouraged some Americans to consider refinancing their existing mortgages to save money. A one-percentage-point decline in mortgage rates can cut $250 off the monthly payment on a $400,000 30-year fixed-rate mortgage, giving consumers cash they can use to spend.

Richard Hunsinger plans to refinance two loans on his Potomac, Md., home into a new 15-year mortgage this week with a 4.37% rate. The 55-year-old dentist is worried that interest rates will eventually rise sharply, boosting the payment on his home-equity line of credit. His first mortgage, also a 15-year loan, currently has a fixed rate of 5.25%. And while the rate on his $240,000 home-equity loan is just 3.25%, it has risen as high as 8% in the past.

Rates "can't stay low forever," says Dr. Hunsinger. If they go up over the next year, "this will look like a really bright decision."

By historical standards, rates are incredibly low. Until 2003, rates on 30-year fixed-rate loans hadn't dipped below 5% since the 1960s. Rates fell to similar points throughout much of the past year as the government was helping to hold down costs for borrowers.

Nearly half of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 5.75% or higher and could reduce their rates by a full percentage point if they refinanced at current rates, according to investment bank Credit Suisse.

Many of those borrowers may have tried to refinance last year, only to find that they couldn't qualify. When rates fell to similar lows in 2003, refinance activity hit a record $2.9 trillion, compared to $1.2 trillion last year, according to Inside Mortgage Finance, a trade publication.

Now, more private investors are coming into the market for loans, offering better prices for securities containing mortgages with low rates than they were one year ago. That could lead banks and brokers to cut upfront origination fees, and borrowers who are able to refinance could find it cheaper to do so than last year.

"I'm calling people back and saying, 'Now it's worth it,'" says Michael Menatian, a mortgage banker in West Hartford, Conn