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Residential financing rates close in on yearly lows

Posted on Thursday, August 21, 2014 at 10:12:55 AM

So far in 2014, residential financing rates have remained near historic lows. This is great for homebuyers and affordability, as many people are having an easier time finding their perfect homes.

According to Freddie Mac, the 30-year fixed-rate mortgage has recently fallen to its lowest point this year, at 4.10 percent for the week ending Aug. 21. At the same time last year, it was 4.58 percent. The 15-year FRM also ticked down on a weekly basis, now at 3.23 percent compared to 3.24 percent. While still below its year-ago level, it isn't its lowest point of 2014 as well.

"Mortgage rates were down slightly this week, following the decline in 10-year Treasury yields," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Meanwhile, housing starts in July jumped 15.7 percent to 1.093 million units after falling 4.0 percent a month earlier. Also, July's consumer prices increased at a 0.1 percent seasonally adjusted pace, the slowest in five months."

In addition, the Mortgage Bankers Association reported that interest in residential financing is on the rise. Mortgage applications climbed 1.4 percent on a weekly basis in late August. Refinancing comprised 55 percent of total mortgage activity this month.