Home Loan Rates Falling
Home loan lenders throughout the area might need to bring on additional staff. Many are scrambling to be able to assist people looking to refinance their mortgages or get a new one. Rates are falling. Notably. Mortgage buyer Freddie Mac reports the average rate for a 30-year fixed-rate mortgage has dropped to 3.45%. The average rate on a 15-year fixed mortgage slipped to 2.95%. Of course, daily rates change. Retail rates are totally dependent on what local lenders are willing to offer. The Federal Reserve's recent decision to cut to the prime lending rate by a half-point is the primary reason for the latest drop. An executive with Michigan based Quicken Loans says market concerns are pushing people out of stocks and into bonds. The rush of investors toward the safe havens of U.S. government securities pushed the yield on the 10-year Treasury note to below 1% this week, a record low. Long-term mortgage rates usually follow the yield on the 10-year note.
The potential savings for homeowners or buyers is significant. On a $250 thousand dollar loan, a three-quarter point drop in the interest rate means savings of about $13-hundred dollars a year. United Shore Mortgage based in Pontiac is reporting a big surge in refinance and new loan applications. The company employs 54-hundred. But it is planning on hiring another 2,000 people this year to meet what it believes will be a long term increase in the home lending business.