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Monday, June 2, 2014


Borrowers Show No Rush to Grab U.S. Rate Break

U.S. mortgage rates were forecast to escalate this year but instead are dropping. Interest rates unexpectedly declined after the Federal Reserve began scaling back its stimulus plan that had kept borrowing costs near historic lows since 2011. Rates on 30-year fixed loans dipped to 4.12 percent this week -- the lowest level in seven months, according to Freddie Mac -- and have now declined for five straight weeks. Still, the decline in borrowing costs has so far done little to boost sales, which have been hindered by tight credit and low inventories. The National Association of Realtors and Moody's Analytics have lowered their 2014 outlooks for 30-year loan rates but still expect the benchmark to move closer to 5 percent by the end of the year. "It's a temporary window of opportunity for buyers in that a year from now rates will be higher," says Moody's chief economist Mark Zandi.

From "Borrowers Show No Rush to Grab U.S. Rate Break"
Bloomberg (05/30/14) Gopal, Prashant; Leondis, Alexis

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