Just days before the Federal Reserve pledged to keep rates near historic lows through the first half of 2013, many homeowners are jumping on the refinance bandwagon in the wake of the current financial crisis, and it may be a good time to refinance your existing mortgage. For many this is the perfect opportunity to Buy a home at the lowest prices seen in the past decade. Overall, new purchase and refinance Mortgage applications shot up 21.7 percent for the week ending August 5, according to the Mortgage Bankers Association Market Composite Index. The spike was largely driven by a 30.4 percent jump in the group’s refinancing index.
“These are the kind of levels that people should lock in for the long term and it certainly is what the government has in mind,” says Dan Nigro, principal at Warfield Consultants in Montclair, New Jersey. But the Fed rates can move up anytime. Since Standard & Poor’s downgrade of the U.S. credit rating from triple-A to double-A-plus, Treasury yields have fallen, but mortgage rates may not do down at the same pace.
Mortgage rates tend to mirror long-term U.S. Treasury rates, which have declined in recent weeks. The benchmark 10-year Treasury note hovered around 2.12 percent late Wednesday and set a record low auction yield of 2.14 percent the same day.
The market for first-time home buyers has never been better. Visit us at www.highlandrealestate.net to start your home search today.