Concerns that a severe housing downturn and prolonged credit crisis could rattle consumer confidence and hurt the broader economy contributed to a sharp drop in mortgage rates last week, according to Freddie Mac.
Interest on 30-year fixed loans sank to 5.96% from 6.10% last week, landing at the lowest point seen since September 2005. Borrowing costs on 15-year fixed products fell to 5.65% from 5.73% over the week and five-year adjustable-rate mortgages were down to 5.75% from 5.86%, but one-year ARMs somewhat expectantly bucked the southward trend by bumping up to 5.46% from 5.43%. “With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed,” said Freddie Mac chief economist Frank Nothaft.
I certainly expect Nashville mortgage rates to continue to fall, but would not be surprised if they bumped up a little next week due to a poor Christmas turn out. Look for rates to fall significantly in the beginning of 2008.
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