US 30-yr mortgage rates drop on Thursday-Zillow

By Julie Haviv

NEW YORK, May 20 (BestGrowthStock) – Interest rates on 30-year
fixed-rate mortgages dropped on Thursday, real estate website
Zillow.com showed, as investors flocked to safe-haven Treasury
debt.

The drop in rates bodes well for the hard-hit housing
market as it copes with the absence of government support.

Mortgage rates for 30-year fixed mortgages, the most widely
used loan, were 4.63 percent Thursday afternoon, down from 4.70
percent on Wednesday and 4.80 percent at the same time last
week, according to Zillow Mortgage Marketplace.

The 30-year fixed mortgage rate hovered between 4.70 and
4.75 percent for most of the week before falling Thursday
morning. The last time the 30-year fixed rate was at the
current level was in early December 2009, Zillow said.

Lower interest rates on mortgages should buoy refinancing,
putting more cash into consumers’ hands to funnel into the
economy. They also make homes more affordable during the spring
selling season, the industry’s most important period.

“Rates are down because of both market uncertainties
arising from the debt issues affecting a few European
countries, particularly Greece, and because of very low
inflation expectations,” Stan Humphries, Zillow chief
economist, said in a statement.

“Inflation appears to be even less of a fear given recent
price data,” he said.

Low inflation makes it more likely that the Federal Reserve
will keep interest rates near zero for the near-term and this
is keeping mortgage rates low as well, he said.

Fifteen-year fixed mortgage rates were at 4.09 percent,
nearly unchanged from Wednesday, but down from 4.25 percent the
week prior. Rates for 5/1 adjustable-rate mortgages, or ARMs,
set at a fixed rate for five years and adjustable each
following year, were 3.44 percent, up from 3.42 percent on
Wednesday, but down from 3.50 percent the prior week

Recent robust housing data show the sector has benefited
smartly from recently expired home buyer tax credits.

Those seeking to take advantage of the $8,000 first-time
home buyer tax credit or a $6,500 credit for home owners buying
a new residence had to sign contracts by April 30 and have
until June 30 to close the sales.

Mortgage rates are linked to yields on Treasuries and
yields on mortgage-backed securities. Yields move inversely to
price.

Treasuries prices soared on Thursday as euro-zone fiscal
tightening and sliding stock and commodity prices heightened
fears of slowing growth and sent investors into safe-haven U.S.
government debt.

Stock Market Money

(Editing by Dan Grebler)

US 30-yr mortgage rates drop on Thursday-Zillow