Why Fed Rate Cuts Do Not Equal Lower Mortgage Rates

202232 Resource 178438 178982 178982 1208997321758 1208997029828 Controlled Mortgage Rate Review

Mortgage rates remain low but are rising

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.97 percent in March from 5.92 percent in February; the rate was 6.16 percent in March 2007. <a href="http://www.realtor.org/press_room/news_releases/2008/existing_home_sales_slip_in_march.html">Source: National Association of Realtors® press release, April 22, 2008.</a> Lawrence Yun, NAR chief economist, said yesterday that the mortgage market is performing unevenly.  <a title="Realtor Press Release" href="http://www.realtor.org/press_room/news_releases/2008/existing_home_sales_slip_in_march.html" target="_blank">“Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he said.  “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”</a> In other words, the real estate market is slow even though mortgage rates are great.NAR President Richard F. Gaylord, a broker with <a title="RE/MAX International Corporation" href="Remax.com" target="_blank">RE/MAX</a> Real Estate Specialists in Long Beach, Calif., said there are problems with the implementation of mortgage guidelines.  <a title="NAR Press Release" href="http://www.realtor.org/press_room/news_releases/2008/existing_home_sales_slip_in_march.html" target="_blank">“It appears there is some over-reaction on the part of some lenders now in requiring higher down payment percentages than may be necessary,” he said.  “On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans.  However, because lenders don’t have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing.”</a> Consumers should make sure their mortgage lender is experienced and on top of the latest developments in the market. Yun offered a caution:  “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts,” he said.  “Mortgage interest rates, <a title="Fed rates vs. mortgage interest rates" href="public/blog/196676" target="_blank">which do not move directly with Fed funds rates</a>, may rise measurably and hurt the housing recovery if <a title="Inflationary dangers of Fed rate cuts" href="public/blog/183661" target="_blank">inflation</a> gets out of hand.” 9 application/xml false home loan rates inflation mortgage interest rates mortgage market mortgage news mortgage rates Why Fed Rate Cuts Do Not Equal Lower Mortgage Rates Tracking rates and explanation of deviations http://blog.bestflagstaffhomes.com/public/blog/196676 Fed Rate Cuts May Not Lead to Lower Mortgage Rates in Flagstaff History Shows That the Opposite Effect Is a Risk for Today's Home Buyers http://blog.bestflagstaffhomes.com/public/blog/183661 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 75.160.24.218 false true false false true 178975 false false true false false false true 178438 blog blogsite/BestFlagstaffHomes/web