Mortgage Rate News

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Sales of existing homes dipped in August, but new home sales increased. However, they didn’t increase as much as analysts had hoped, reports CNN Money:

New home sales rose 0.7% last month to a seasonally-adjusted annual rate of 429,000, the Commerce Department reported. That was up from a downwardly-revised reading of 426,000 in July.

Analysts had expected the rate of new home sales to rise to 440,000 last month, according to a consensus estimate of economists compiled by Briefing.com

It appears that the pace of home sales is slowing. Earlier this year, home sales began picking up as the new home tax credit offered an incentive to purchase. Additionally, it helped that mortgage interest rates were low. However, they began creeping up as signs of economic improvement began to appear.

Mortgage interest rates dip again

Now that the latest home sales data is out, though, it seems as though mortgage rates are ready to fall back.  Even though the Fed will soon end its Treasury buying program, mortgage rates have not been able to sustain a steady rise. Subprime Blogger reports on this development:

After the Fed mentioned that they were going to stop buying US Treasuries and spread out the amount of money to buy mortgage backed securities several analysts felt that mortgage rates were going to move up albeit slowly.  Since the meeting mortgage rates have moved up briefly but seem to drop anytime there is up ward movement.  It will be interesting to see if this continues to be the case through the month of October.

Clearly, things aren’t recovered enough for mortgage interest rates to remain above 5%. And that means that if you are interested in buying or refinancing, now may be a good time. Indeed, locking in rates while they remain volatile (and under 5%) can save you thousands of dollar over the life of you mortgage loan.