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Bankrate: Mortgage Rates Fall to Three-Month Low
Mortgage rates declined for the third time in the last four weeks on the heels of slower second quarter economic growth. The average 30-year fixed rate mortgage fell to 6.65 percent, the lowest since April 26. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.3 discount and origination points. The average 15-year fixed rate mortgage, popular for refinancing, dropped by a similar amount to 6.3 percent. On larger loans, the average jumbo 30-year fixed rate declined to 6.86 percent. Adjustable rate mortgages also declined. The average 5/1 adjustable rate mortgage slid to 6.36 percent, and the average one-year ARM retreated to 6.03 percent. Validation that the economy did indeed grow at a slower pace pushed mortgage rates lower this week.
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Is it Time to Buy US Homebuilder Shares?
Gary Dorsch (Global Money Trends) submits: More home builders are cutting their 2006 profit outlooks as second-quarter orders for new homes have come down significantly from a year ago. Housing stocks have crashed from the stratosphere, as traders focused on earnings warnings and lower new-home sales in June. Pulte Homes (PHM), one of the nation's largest builders, on July 26th, said its profit fell 20% and lowered its 2006 outlook.
Unsold New homes equal a record 6.1 months of supply, and existing US homes are stagnating at 6.8 months of supply. New home sales were 11.1% lower in June from a year ago, but prices are still 2% higher on average at $231,000. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended July 28 fell 1.2% to the 528-level, it's lowest since May 2002.