Lending Landscape - September 27, 2007

The mortgage markets have settled down a bit since last weeks rate cut by the Federal Reserve Board. While short term rates did go down, the bond markets turned long term rates for 15 and 30 year fixed mortgages up. This was reflected in today's interest rate report -

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.42 percent for the week ended Sept. 27, up from 6.34 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.31 percent.

In its latest report, Freddie Mac said rates on 15-year fixed-rate loans averaged 6.09 percent in the latest week, up from 5.98 percent last week. A year ago, the 15-year rate averaged 5.98 percent.

As the markets have settled, the 10 year bond which is most closely tied to establishing long term mortgage rates has come down. Expect to see these rates adjust down in the coming week. Meanwhile, short term rates for adjustable rate mortgage have come down from last week, but are still higher than last year.