Mortgage Interest rates appear to be at their lowest levels in nearly 38 years. At the same time home buyers are at nearly twice the levels they were this time last year. All in all it doesn’t look like housing roller coaster will end any time soon. Reports came out today indicating that 2010 may contain the most housing defaults and foreclosures yet to date.

As long as Mortgage interest rates remain below 5% and government tax incentives remain in place, this will still represent one of the biggest buying opportunities of our lifetimes. States such as Georgia have now negotiated the tax incentives to first time buyers and current homeowners remain in place until June of 2010.

Mortgage Rates Fell to 2009 Low

Mortgage rates are on a roll. Rates fell last week to their lowest levels seen all year. According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Downshift, Match Year’s Low,” the conforming 30-year fixed rate dipped below the 5% mark.

“Although one might have thought that everyone knew that a sluggish economic recovery is on tap, a reiteration of this by Federal Reserve Chairman Ben Bernanke [last] Monday seemed to push some investors out of equities and back into bonds, driving yields and mortgage rates downward.”

“HSH.com’s overall average for mortgage rates, as measured by our Fixed-Rate Mortgage Indicator FRMI, declined by seven basis points (0.07%) [last] week, with the average price of all loans — conforming, jumbo and agency jumbo combined — slipping to 5.28%. The overall average for 5/1 Hybrid ARMs eased by three basis points, finishing [last] week at 4.58%. Conforming 30-year fixed slipped below the 5% mark, the 5th time they’ve done so this year, and have now matched 2009 lows. This is occurring despite an improving economy, which usually brings somewhat firmer interest rates.”

“Slower holiday demand for mortgage credit could see interest rates move a little lower in the days and weeks just ahead, but even slight additional dips may bring in enough business to lenders as to keep rates fairly steady. As we’ve noted in the past, there no reason to run a sale when the store’s already full of customers.”

“[This] week’s a holiday-shortened one. Mortgage rates probably don’t do much of anything in the three-day period, and bond markets and HSH are closed on both Thursday and Friday.”

“Looking at the longer term? You’ll need to read our latest two-month forecast.”

Click here to continue reading “Mortgage Rates Downshift, Match Year’s Low.” HSH’s free weekly Market Trends Newsletter, an in-depth analysis of various financial markets of the week prior, is published every Monday. Email subscribers receive it in your inbox by Friday night, so sign up today! Also, be sure to check in with our Market Trends blog for all news relating to any weekly shift in mortgage rates.

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• Mortgage Rates Fell to 2009 Low (hsh.com)

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Mortgage Rates

30 yr fixed mtg	5.03%
15 yr fixed mtg	4.51%
30 yr fixed jumbo mtg	5.86%
5/1 ARM	4.38%
5/1 jumbo ARM	4.89%

Find personalized rates:

Rates provided by Bankrate.com.

NEW YORK (CNNMoney.com) — The possibility of securing a mortgage rate below 5% has greatly improved in recent weeks, in a positive sign for would-be home buyers.

Home mortgage rates fell for the sixth straight week, according to two key measures, with one of them pointing to a sub-5% rate for the 30-year fixed loan for the second week in a row.

Freddie Mac’s (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week’s rates stood at 4.94%.

Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before.

The 30-year rate is influenced by the benchmark 10-year note’s yield, which moves in the opposite direction of its price. Treasury prices have risen over the past week as $78 billion worth of auctions received above-average demand.

“Another disappointing employment report had investors questioning the strength and sustainability of the economic rebound,” the Bankrate report said. “The resulting uncertainty drove investors into the safety of government and mortgage-backed bonds.”

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