30-year fixed-rate mortgage at 37-year low

Fed actions send mortgage rates tumbling, and refinancers searching

（太公註﹕這個次標題﹐並不正確﹐相當誤導真正的原因）

By Steve Kerch, MarketWatch

Last update: 11:30 a.m. EST Dec. 18, 2008

Comments: 162

CHICAGO (MarketWatch) -- The benchmark 30-year fixed-rate mortgage tumbled to a national average 5.17% this week, the lowest level since Freddie Mac began its weekly rate survey in 1971.

With the Federal Reserve cutting its interest rates to near 0% and a continued decline in rates on the long-term Treasury notes that mortgages closely track, rates on other types of mortgages dropped again this week, although not as much as the 30-year.

"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac chief economist. "The decline was supported by the Federal Reserve announcement on Dec. 16, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."

The 30-year mortgage fell for the seventh consecutive week, dropping from 5.47% a week ago. A year ago the 30-year averaged 6.14%. It took a national average 0.7 point to obtain that rate, though; a point is 1% of the loan amount, paid upfront as prepaid interest.

The 15-year fixed-rate mortgage averaged 4.92% with an average 0.7 point, down from last week when it averaged 5.20%. A year ago the 15-year loan averaged 5.79%. The 15-year mortgage has not been lower since April 1, 2004, when it averaged 4.84%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.60%, with an average 0.6 point, down from last week when it averaged 5.82%. A year ago, the 5-year ARM averaged 5.90%.

One-year Treasury-indexed ARMs averaged 4.94% this week with an average 0.5 point, down from last week when it averaged 5.09%. At this time last year, the 1-year ARM averaged 5.51%.

The sharp decline in rates has spurred a flood of mortgage refinance applications, the Mortgage Bankers Association said Wednesday. See how mortgage refinancing has jumped.

Steve Kerch is assistant managing editor and personal finance editor of MarketWatch in Chicago.

六十天前本主欄文有言﹕

好吧﹗太公再度斗膽﹐就資金互動論﹐提出最近一個預言﹐房貸市場將因債市資金大增﹐房貸利息不下跌也難。【註﹕這與昨日聯儲會降低短融資期息﹐並無必然或直接的關聯﹔蓋聯儲會的貨幣﹑金融管控力﹐只能影響短期商業貸款﹐對長期三十年房貸市場﹐就無能為力﹐有賴超越聯儲會公權力的國會及布希政治力。】

Mortgage rates plummet after Fed action

30-year fixed-rate mortgage hasn't been lower since January: Freddie Mac

It is too bad to see a "run bank."  But now it is even worse that we can see "run Mutual Funds" created by the Hurricane Paulson.  (NOTE:   I confess that I did run my pension fund months ago, much earlier than Paulson pulled out his 3 page plan sketch. Say, last November I sold out my Euro-Pacific fund for cash at $56.78 and now it is $30.27 a share yesterday.  I know it will go under $28 today.  However, I didn't do anything or make any inputs to it at this time. So don't blame me for this mess.)

GWB still wrongly insists that the "core" of problems is credit freeze after the Dow down 1,200 points this early morning. 

This morning GWB says that we the investors have to give his "stabilization" law some time to work out.   McCain also says "to protect American people's 401K plan is in need."   Okay, I understand (like GWB keeps claiming "I understand how you feel" when he doesn't mean it) you need a break, but whoever is going to give American people a break while you guys are creating a financial hurricane? 

People is no longer counting on your "lip service", if not a lie, they know they have to take their own actions to protect their own money so that they go "run mutual funds."   As a result, all the funds have to sell its holdings to meet the redemption requests from its holders.   In turn, that has created a huge unbearable pressure to sell madly in the stock market (Trust me, the last thing a fund management wants is to "hold" a redemption, i.e. literally to declare a "death" sentence to the fund). 

It is an instinct for people withdraw their fund out of "feeder funds" or "mutual funds" under pressure or anxiety, as we put our feet on brake immediately when we drive and hear a big sudden "CRY." (NOTE: May I ask who first did that by crying out an "URGENT" need of $700 Billion plot so loudly?)   GWB, please don't expect people "see it clearly" as you said and act different as your asked by "use anxiety to beat anxiety" in your speech this morning (as of Oct 10, 2008).  Don't blame people to wirhdraw fund for liquid cash, it is just a human nature. 

GWB,  particularly when people recall your saying that "stabilization" bill is in an urgent need and now they look at what comes out of your lips: "it takes time to work," (NOTE: It can be interpreted as "not so urgent," to make people wonder why you push the law through and want the tool "to act now" in a week)  Your words is not going to work.

Let's follow the wisdom those French businessmen had when in 18th century they said to their finance minister: "Just leave us alone," take easy to watch the show.  GWB, allow me to learn and quote your phrase "I believed," I believed that the result would be much better if you wouldn't put your powerful fists in the air.

Come on, GWB, give me a break. 

10/10/2008 02:07 PM

by E T

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