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Wall Street's wild ride sinks mortgage rates to new low
By Palm Beach Business.com
DELRAY BEACH — Mortgage rates dropped to a record low over the past week, according to Freddie Mac. That’s hardly surprising, given the events of the past week and how they affected the stock market and Treasury bonds.
Bankrate’s national mortgage survey found rates dropping more modestly.
Freddie Mac’s Primary Mortgage Market Survey found the average 30-year, fixed-rate mortgage dropping to 4.15 percent with 0.70 point from 4.32 percent a week earlier, beating the previous record of 4.17 percent set last November.
Bankrate, on the other hand, had the 30-year dipping to 4.45 percent with 0.45 point, from 4.46 percent a week earlier.
Credit rating agency Standard and Poor’s on August 5 dropped downgraded U.S. debt, setting off one of the wildest weeks in stock market history, which pushed down long-term rates for U.S. Treasury bonds, particularly the 10-year bond used as a benchmark for mortgage rates. Then there was the revival of concerns over the European debt situation.
"The Federal Reserve's policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows,” Freddie Mac Chief Economist Frank Nothaft said. “For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011.”
The 15-year fixed rates also dropped, to 3.36 percent with 0.6 point from 3.50 percent a week earlier, according to Freddie Mac. Bankrate found the 15-year averaging 3.58 percent with 0.42 point, down from 3.61 percent a week earlier.
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