December 8, 2006

THEY'RE STILL USURIOUS:

Falling mortgage rates = big savings (Noelle Knox, 12/08/06, USA TODAY)

If you're thinking of buying a home, here's a sum that will get your attention: $13,763.

That's what you'd save in interest over the life of the loan if you bought a $221,300 house (the U.S. median price) with an average 30-year fixed-rate loan today, instead of paying the average rate for this year.

Mortgage rates have fallen for 10 of the past 13 weeks and are now averaging 6.11%, the lowest since January, Freddie Mac said Thursday. Six months ago, the average rate on a 30-year fixed loan was 6.67%. The average for this year is 6.44%.


Borrowing decline is greatest since '92 (Vincent Del Giudice, 12/07/06, Bloomberg News)
Borrowing by U.S. households declined in October by the most in more than a decade as demand for auto loans cooled from the previous month, a Federal Reserve report showed.

Consumer credit, or nonmortgage loans to individuals, fell $1.24 billion, the biggest monthly decline since 1992, to $2.378 trillion, the Fed announced Thursday. Consumer credit fell 0.6 percent at an annual rate after rising 2 percent in September.

"People are saying, 'Yikes, I've got too much debt and have to cut down on spending,' " said Bill Hampel, chief economist at the Credit Union National Association in Washington, D.C.


No, they aren't. It just doesn't make as much sense to borrow money when the Fed has rates running so far above non-existent inflation.

Posted by Orrin Judd at December 8, 2006 7:33 AM
Comments

Have a friend who's a mortgage banker, and he called because we're redoing the kitchen. We have a 5.625% 30/yr, but if our HELOC rate was high, could roll everything into a 5.875%/30 yr and they upped the amount considered a conventional loan and we would have qualified.

We're not doing it, HELOC was locked in at 6.99% for 5 years, we'll get it paid off.

Posted by: Sandy P at December 8, 2006 10:42 AM
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