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Thursday, September 4, 2014

Mortgage Rates Hit 2014 Low

According to Freddie Mac's weekly survey, the average rate for a 30-year loan has stood at a low of 4.1% over the past two weeks. This is the lowest level that average 30-year mortgage rates have reached since June 2013. For average 15-year fixed mortgages, the average rate is currently at 3.24%.

The government's stimulus program has successfully provided a steady market for mortgages. The Federal Reserve has been purchasing Treasury Bonds and mortgage-backed securities for years, keeping borrowing costs low for prospective home buyers. The Reserve has recently cut back on its purchases and plans to end the buying program entirely in October. This will effectively reduce the demand for mortgage bonds and eventually cause rates to climb.

A recent report from the National Association of Realtors also shows the housing market has had a strong summer with sales of existing homes rising 2.4% in July. Stronger job growth, a larger inventory of homes, and slowly climbing home prices have boosted activity on the market. These conditions are expected to provide a solid foundation for homes sales in the fall.

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