Just some months ago, people were focused on the increasing rates of home mortgages. Things were going in favor of home mortgage lenders. However, now things are getting backward and against these home mortgage lenders. In May, the rates on long-term mortgage were dropped constantly for 6 straight weeks.
According to some sources, average mortgage rate on 30 year FRM was slightly decreased from 4.61% to 4.60% during the last week of May that will be the lowest figure since last December. One year prior to the, the common rate of mortgage interest was 4.84%. The average interest rate on 15 year FRM was decreased by 0.02% from the figure of 3.80% which was 4.21% last year.
While the ARM is concerned, its average rate was decrease from 3.15% to 3.11%. The average rate on ARM was 3.95% last year.
As the rates were going down for these mortgage loans, the application for the mortgage loan went up by 1.1% according to some home mortgage lenders. On another hand, those who have borrowed mortgage loans chose to refinance them to allow them to take full advantage of the opportunity. For this reason, the percentage of refinancing activities on mortgages was increased from 66.7% to 66.8% recently. While the application for home purchasing was increased by 1.5%.
As if it wasn’t enough, the rates on mortgages fell again on the last day of May. This created the lowest average rates on mortgage which has never been seen before. This record breaking fall in average rates was a critical blow to numerous home mortgage lenders. For a few cities it absolutely was the lowest figure in last eight years, while for others it absolutely was lowest since the season 2000. Some experts have even said that slump is worse than it absolutely was in great depression era.
This double fall in average rates in addition has raise the percentage of foreclosures recently. Experts have said that percentage will continue to boost as you will find odds of more falls in average rates in future. Chicago mortgage expert It has already been seen that numerous home buyers are actually going for rent houses because of the persistent decrease in value. They are involved that doing investment on something that will be decreasing in value will take a loss to them. Not only them, but many home mortgage lenders may also be focused on the future of home mortgage system.
Some reports have stated that even some major metropolitan cities of US have now been hit by this slump, except Washington. Many of these cities are actually experiencing rise in foreclosures and refinance. This slump is a huge heaviest blow to any or all the home mortgage lenders round the US.