Mortgage rates in the U.S. for 30-year loans slipped straight third week and lowered the borrowing costs.
A report by McLean, a Virginia-based mortgage company, states that the average rate for a 30-year fixed mortgage was 4.12 percent this week, down from 4.14 percent, Freddie Mac said in a statement, reports Bloomberg. The average 15-year rate held at 3.22 percent.
The report also showed that there has been a growth in people buying houses. Contracts to buy pre-owned houses in the U.S. increased 6.1 percent in May, the biggest monthly gain since April 2010, the National Association of Realtors stated this week. "Housing is on a slow recovery path with credit conditions being crucial to the outlook," Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, said in a July 1 note to clients. "Real estate lending is picking up but far from booming."
Rates remained tight for several weeks. Although the news might be good to those hoping to get a low mortgage rate, but borrowers should not get smug, said Brian Koss, executive vice president of Mortgage Network in Danvers, Massachusetts.
"We like it when rates are predictable, although it gives people a false sense of security," he said. "When rates move, they move very quickly, so one of the negative things is it is keeping people on the fence. They think, 'What's the rush?'"
On the other hand, mortgage applications saw a slump for a fifth time in six weeks, according to Mortgage Bankers Association. Its seasonally adjusted index of mortgage application activity including both refinancing and home purchase demand, fell 0.2 percent in the week ended June 27, reports Reuters. The survey covered at least 75 percent of U.S. retail residential mortgage applications.
