Current Mortgage Rates Drop Back Below Percent

Current mortgage rates fell back below 5 percent this week following promising signs for the economy. The average rate on 30-year fixed rate mortgages was 4.97 percent, eight basis points lower than the previous week.

Rates have been kept low by the Federal Reserve’s purchase of $1.25 billion worth of mortgage backed securities, which it will cease doing at the end of March. It is unclear what will happen when the Fed withdraws this support from the market.  The federal government’s first home buyer tax credit also expires at the end of April.  The consequence of  its expiration also remains to be seen.

This news follows closely the news that the economy lost fewer jobs than expected in February. The unemployment rate stayed at 9.7 percent, while economists predicted it would rise to 9.8 percent. Stocks and oil rose in early trading on Friday after the employment news broke. There is guarded optimism that the employment picture may finally be stabilizing.

Retail sales also rose 3.7 percent in February, the biggest one-month gain since 2007. This is the third consecutive monthly retail increase. Factory orders also rose 1.7 percent in January, and durable goods purchases went up 2.6 percent. Factory orders have gone up nine out of the last ten months.

Although existing home sales dropped 7.6 percent in January, many economists believe this is due at least in part to the unusually bad weather across much of the country. Foreclosures were up in January over the previous year, and it will likely take several years for the housing market to totally recover, and that the recovery is largely predicated upon a better employment picture.

The Federal Reserve has repeatedly indicated that it will keep interest rates low in the near future to support the fledgling economic recovery, but that rates will likely increase sometime in 2010 to combat inflationary pressures.

Right now Total Mortgage Services is offering some of the best current mortgage rates in the nation, 30 year fixed rates starting at 4.5 percent, 30-year jumbo mortgage rates starting at 5.75 percent,  and five-year adjustable mortgage rates starting at 3 percent.*

*Mortgage rates are volatile and may change multiple times in a day.  All mortgage rates quoted as of 10AM on Friday, March 5th.

Total Mortgage Services would like to assist you with all your mortgage needs.  To speak with one of our mortgage experts, call us today at 888-868-2509.