Rates on a thirty year mortgage fell below six percent this week, the first decline in the past month.¬† Freddie Mac, the mortgage company, reported that thirty year fixed rate mortgages averaged 5.94 percent, down from 6.10 percent last week.
If you have been following the mortgage rate roller coaster, you know it has been up and down in the past few months, like a squirrel on the road, not knowing exactly which way to go.¬† In late July rates were at 6.63 percent and then dropped below 6 percent in mid-September.
On 15¬†year fixed rate mortgages the rate dropped to 5.63 percent, compared to 5.78 percent last week.¬† Adjustable rate mortgages fell to 5.90 percent from 6.00 percent.
As you can see the market is all over the radar scope.¬† I believe we will see rates continue to decline, it is one of the last tools the Fed has to offer, that may help this unstable market.¬† The Fed lowered the rate that banks pay to borrow money, which is good, only if the banks are lending money.¬† In my opinion, if the banks don‚Äôt get money on the street to the average consumer, (those that are still willing to purchase) for home, auto, boat, and RV loans, and money to businesses, both large and small, to keep the doors open and make payroll, then I don‚Äôt see this economic engine running as it should.¬† As I have said many times in the past, this economy is tied directly to the housing industry; like a train, housing is the engine. When it stops, so does the rest of the train.