Fixed-rate mortgages continue to drop for the third consecutive week, according to latest PMMS Survey, but the housing demand seems to have not impacted from the interest rate dip. The phenomenon is causing concern for the real estate professionals and experts are busy finding out the reasons of what ails the realty business.
The Freddie Mac's Primary Mortgage Market Survey shows a drop in every loan categories for the week ending March 03, 2011. The 30 year fixed rate mortgage is dropped by 0.08 percent from 4.95% last week to 4.87% this week. The 15 year FRM recorded a drop of 0.07 percent from 4.22% last week to 4.15% this week.
The fall has also been observed in the adjustable rate categories of home loans. According to PMMS, the interest rate for 5/1 year ARM has averaged 3.72 in the current week. The percentage in the previous week was 3.80; however there has been no change in fees & points. The decrease percent is the highest for the 1-year Treasury-indexed ARM, which averaged 3.23 percent this week, down from the previous week by 0.17 percent, when it averaged 3.40 percent.
Despite falling rates and increasing affordability, the housing demand is not picking up. The January sales figures for new homes were near record low since 1963. The pending sales of existing homes are also falling, giving a cause of concern for the real estate industry professionals.