by STAFF WRITER Published June 17, 2010 Credit Unions Online
Freddie Mac's Primary Mortgage Market Survey (PMMS) indicates average 30 year fixed rate mortgages moved up to 4.75 percent with 0.7 points. This is a modest change from last week's 4.72 percent and lower than this time last year when average 30 year fixed rate mortgages were 5.38 percent. The 15 year fixed rate mortgage average was 4.20 percent with 0.7 points, another modest change from last week's 4.17 percent. Last year's 15 year fixed rate mortgage average was 4.89 percent.
“Mortgage rates were little changed this week amid preliminary signs that the expiration of the homebuyer tax credit in April may have led to a slowdown in new construction,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Starts on single-family homes fell 17 percent to an annualized pace of 468,000 units in May from April’s 20-month high. In addition, permits on one-unit homes fell to the slowest pace since May 2009. Finally, builders became more pessimistic in their near-term outlook in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
“Nonetheless, household balance sheets have been improving over the past four quarters. In aggregate, households gained $6.3 trillion in net worth in the first quarter from a year ago, according to the Federal Reserve. In addition, homeowners have regained $1.1 trillion in home equity over the same time period.”
Moving forward, only time will tell how long the recent dip in sales, resulting from the tax credit expiration hangover, will dampen the market. As home buyers rushed to purchase their homes before the April 30, 2010 deadline, buyers are more difficult to come by with no available tax credit. Most economists predict the market to struggle for a few more months while the effect of the artificial increase in demand, leading up to the tax credit expiration, slowly stabilizes bringing the housing market back to a more normalized pattern of healthy growth. If employment increases, the housing market recovery should follow.
When you are ready for a new home, be sure to check with your local credit union for a mortgage loan. You will likely find the best rates and you will certainly discover the friendliest service.