Mortgage Rates Rise as Foreclosures Increase

The Federal Reserve announced that the average rate of a 30 year fixed rate mortgage rose to 5.38%, up from 5.17% the week before.  The average rate for a 15 year fixed rate mortgage is now at 4.71%, up from 4.6%.

Real estate research firm Zillow reported on Tuesday that, while home values continue to fall, some areas are posting small gains.  Home sales fell nationwide in June compared to June 2008 but were up slightly over May 2009 sales.

Second quarter data reveals home prices dropping by a record 15.6% from the previous year. The median price of an existing single family home dropped to $174,000, this is the largest recorded drop since 1979 according to the National Association of Realtors. Almost one quarter of all homeowners are now buried under a mortgage that is larger than the value of their home. This figure could rise to as much as 30% by the middle of next year.

The estimated median value for a single family home dropped 12% from the previous year, nearly 25 million homes… or 48% of all mortgage properties, will be up-side down as prices drop through the first quarter of 2011 according to analyst at Deutsche Bank. These numbers and forecasts are not limited to the United States. Analyst and experts in Europe are predicting similar numbers and have taken steps to insure that they will weather this storm with more fiscal responsibility.

The Bank of England has confirmed that 51,100 mortgages were approved in June compared to 45,000 in May.  This indicates there is growing demand for mortgage funding and ultimately UK property. However, the jump in demand between May and June appears to have caught many UK mortgage lenders off-guard and threatens to push up mortgage rates in the short to medium term as long-term finance rates start to rise.

Related posts:

1. 30 Year Rates Drop Below 6 %
2. 30 Year Mortgage Rates Fall Below 5%
3. Federal Reserve Move Lowers Mortgage Rates Below 5%
4. Mortgage Rates Drop as Unemployment Rises
5. Higher Mortgage Rates Possible

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