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Another week, another decrease for residential financing rates

Posted on Thursday, October 23, 2014 at 10:57:55 AM

Following last week's significant drop in residential financing rates to below 4 percent for the first time this year, Freddie Mac announced that the numbers keep going down.

For the week ending Oct. 23, the 30-year fixed-rate mortgage averaged 3.92 percent, down from last week's 3.97 percent. The 15-year FRM averaged 3.08 percent, a decrease from the previous seven-day period's 3.18 percent. 

"Fixed mortgage rates continued to fall this week, after the yield on 10-year Treasuries dropped to their lowest point of the year," explained Frank Nothaft, vice president and chief economist at Freddie Mac. "Existing home sales beat expectations in September, clocking in at an annual rate of 5.17 million units, up 2.4 percent from August. Housing starts were up 6.3 percent in September, adding a seasonally adjusted annual rate of 1.017 million units."

Due to the decline in rates, borrowers are finding more favorable conditions and also incentives to refinance for a lower rate.

According to RealtyTrac, the number of seriously underwater borrowers has also decreased, with only 8.1 million properties in the U.S. facing a loan amount more than 25 percent higher than the home's value. In fact, the number of seriously underwater homes is at its lowest level since 2012, when RealtyTrac began measuring this statistic.