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US fixed mortgage rates rise | Live Stock Trading News | Equities …

www.livetradingnews.com2/25/12

US fixed mortgage rates rise from historic lows US fixed mortgage rates this week increased from the previous week's record lows as the housing market.

30-Year Fixed Mortgage Rate Rises to Highest Rate in Four Weeks …

www.zillow.com2/21/12

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.76 percent, up from.

The Federal Reserve Bank’s plan to buy mortgage-backed securities in order to drive down interest in the U.S. appears to be working, as fixed mortgage rates fell for a second consecutive week, and the number of mortgage applications rose, boosted by an increase in refinancing applications.

Freddie Mac reported that the rate for a 30-year fixed home loan fell to 4.80 percent from 4.82 percent a week earlier, whilst the 15-year fixed rate remained unchanged at 4.48 percent.

The central bank is attempting to drive down interest rates by cutting the supply of outstanding mortgage bonds, thereby boosting their price and lowering their yields, thus allowing banks to reduce their rates on new mortgages, whilst continuing to sell mortgage securities at a profit.

Celia Chen, who is the senior director of Moody’s, Economy.com commented, “The policy is working. Mortgage interest rates are falling to a record low, which will stimulate some buying of homes”.

The not so good news is that sales of previously owned U.S. homes fell in March, after climbing by the biggest amount in more than five years just one month earlier.

Purchases decreased by 3% to an annual rate of 4.57 million, which was lower than the 4.71 million which was forecast, and prices were down 12% from a year ago, with distressed properties accounting for about 50% of all sales.

The gain in U.S. house prices of .7% in February is the first consecutive monthly gain in two years, and is interpreted by some, but not all experts, as a sign that an end to the real estate slump might sight.

The February prices were still 6.5% lower than a year earlier and were pretty much in line with estimates, and also a recent statement by Federal Reserve Vice Chairman Donald Kohn, “As demand firms, and once inventories of houses, and a broad range of goods are brought into line with sales, economic activity should begin to stabilize,”

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan increased by 5.3% last week and a National Association of Realtors report notes that home sales rose by 5.1% in February.

The number of Americans that signed contracts to buy previously owned homes rose by 2.1% in February, which was led by a 14.5% jump in the Midwest, and a 10.6% increase in the Northeast.

The California and Florida metropolitan areas led the U.S. in foreclosures in the first quarter of this year, and Bruce Norris, who is a principal with the Norris Group said, “Whatever damage has been done in California is only going to get worse because there is a glut of homes owned by lenders that aren’t yet on the market. These homes are like a shadow inventory that is likely to drag down prices further when they come onto the market”.

Norris’s comments are supported by comments on the National Association of Realtors website which states, “U.S. home prices probably will fall 5.1% this year to $188,500, less than the 9.3% plunge in 2008, according to the real estate group. Home resales probably will rise 1% to 4.96 million after a 13% drop last year”.