Interest on 30-year fixed mortgages settled at an average of 5.40 percent this past week, reports Freddie Mac, up from 5.38 percent in the previous week and much lower than the prevailing rate of 6.45 percent a year ago. Five-year, hybrid adjustable-rate mortgages also bumped upa couple of notches to 4.99 percent; but 15-year fixed loans and one-year ARMs moved in the opposite direction. The former slipped to 4.87 percent from 4.89 percent, while the latter fell to 4.93 percent from 4.95 percent.
We expect mortgage rates to remain relatively stable over the next few weeks even as housing sales continue to climb. Refinance applications are down more than 50 percent off of their 2009 highs from 2 months ago. Savvy investors are taking advantage of these rates by picking up distressed real estate investments at remarkably low prices. Do not discount or look past short sales, foreclosures and area REO property. There are diamonds in the rough out there right now!