Market Update

Rates on 30-year Mortgages Decline, Reach Six-Month Low
Martin Crutsinger
San Diego Union Tribune
September 22, 2006

WASHINGTON – Rates on 30-year mortgages fell the week of September 22 to the lowest level in six months, offering support to the sagging home market. Mortgage giant Freddie Mac reported that 30 year, fixed-rate mortgages dipped to 6.4 percent this week, down from 6.43 percent last week. The latest drop puts the 30-year mortgage at the lowest level since it stood at 6.35 percent in late March.

Rates on 30-year mortgages hit a four-year high of 6.8 percent July 20, but since that time have been trending downward as financial markets have become more convinced that a slowing economy and recent declines in energy costs will help keep inflation contained. Such a slowdown would allow the Federal Reserve to keep interest rates on hold. Fed officials announced Wednesday that they were leaving a key interest rate unchanged for the second straight month, raising expectations that the Fed’s two-year campaign to raise interest rates to fight inflation pressures may be coming to an end.

Many analysts believe interest rates will hover around current levels for the rest of the year. Such a development is expected to help the housing industry level off after sharp declines in recent months, which have seen construction of new homes fall to the lowest levels in more than three years.

For more information on this article or assistance with your San Diego real estate needs contact Noel Wheeler of Prudential California Realty at (619) 718-4266 or visit http://www.noelwheeler.com/