Rates continue to drop lower as the 10 yr Treasury slides.

Yields are Lower - Driving Mortgage Rates Lower.

15 Year Fixed Rate -     3.75%

40 Year Fixed Rate -     4.75%

20 Year Fixed Rate -     4.25%

10 Year Fixed Rate -     3.75%

3/1 & 5/1      ARM -      3.25%

7/1                ARM -      3.50%

A slow economic recovery and the possibility of a Fed policy change helped mortgage rates move a little lower again this week. As a result of recent weak economic data, the Fed is reportedly considering the purchase of additional mortgage-backed securities (MBS) to replace maturing securities. These factors, along with limited inflation, make current economic conditions supportive of low mortgage rates.

In particular, Friday's weaker than expected Employment data was positive for mortgage rates. Against a consensus forecast for a loss of -90K jobs, the economy lost -131K jobs in July. This included the loss of -143K census positions. Private employers added 71K jobs, below expectations of 100K. The Unemployment Rate remained at 9.5%. Average Hourly Earnings, a proxy for wage growth, rose at a tame 1.8% annual rate.

The average 30-year fixed rate falls to 4.58% from 4.69% last week, while the 15-year fixed rate slides to 4.04% from 4.13%. The drops follow the decline of Treasury yields.

Los Angeles Times

July 2, 2010

Mortgage rates sank to fresh record lows this week, following the trajectory of Treasury yields depressed by economic worries.

Lenders this week were offering rates averaging 4.58% on 30-year fixed-rate loans of as much as $417,000, Freddie Mac said Thursday. That was down from 4.69% last week — the previous record low — and from 5.21% less than three months ago.

Despite sub-5% rates, the number of Americans signing contracts to buy homes plunged in May after a deadline to qualify for a popular home-buyer tax credit passed. Moreover, mortgage application data show no sign of a pickup in housing demand since then.

"The bad news is we're driving rates down, and there's still nothing on the housing sales side," said Anthony Sanders, a senior scholar in real estate finance at George Mason University's Mercatus Center.

The average rate on 15-year fixed-rate mortgages dropped to a record 4.04% from 4.13% last week.

The Freddie Mac survey, which began in 1971, asks lenders the rates they are

offering a well-qualified borrower with a down payment of at least 20% or at least that much home equity.

To get the rates offered, borrowers would have paid an average of 0.7% of the loan balance in upfront lender fees.

Despite the cheap credit, an index of applications for loans to finance home purchases fell 3.3% last week from the week before, the Mortgage Bankers Assn. said Wednesday. Applications for loans to refinance existing mortgages, however, jumped 12.6% last week to the highest level in more than a year.

In the bond market, Treasury yields have been sliding on worries about the global economy and the prospect that the U.S. could fall back into a recession.

The yield on the 10-year Treasury note, a benchmark for fixed mortgage rates, dropped below 3% this week for the first time in more than a year.

But Fannie Mae and Freddie Mac have tightened their lending standards since the housing crash. In addition to the expiration of the home-buying tax credits, unemployment remains high, depressing housing demand.

"We've exhausted what the government can do for the housing market," said Sanders, who predicts another decline in home prices. "The tax credits were the last hurrah of the stimulus."

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.