Some months ago, people were concerned about 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 which will be the cheapest figure since last December. 12 months prior to this, the average 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% that was 4.21% last year.
As the ARM is worried, 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 the other hand, those people who have borrowed mortgage loans made a decision to refinance them for them to take full advantage of the opportunity. Because of this, 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%.
Like it was not enough, the rates on mortgages fell again on the past day of May. This created the cheapest average rates on mortgage that has never been seen before. This record breaking fall in average rates was a significant blow to many home mortgage lenders. Chicago mortgage rates For many cities it absolutely was the cheapest figure in last eight years, while for others it absolutely was lowest since the year 2000. Some experts have even said this slump is worse than it absolutely was in great depression era.
This double fall in average rates has additionally boost the percentage of foreclosures recently. Experts have said this percentage will continue to improve as you will find chances of more falls in average rates in future. It has already been seen that many home buyers are now actually choosing rent houses due to the persistent decrease in value. They are involved that doing investment on something which will be decreasing in value will take a loss to them. Not only them, but many home mortgage lenders are also concerned about the ongoing 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. Most of these cities are now actually experiencing rise in foreclosures and refinance. This slump is a huge heaviest blow to all the home mortgage lenders round the US.