mortgage rates

The year 2004 witnessed a dip in the mortgage interest rates, the second lowest in a decade. As the US wades its way out of the 9/11 threats and gets Afghanistan and Iraq off its shoulders, the economy has undergone a gradual stabilizing process.

2005 is expected to see rates rise. Experts say it will not exceed 7% as in 2001 and before.

Let us analyze what really happened to the interest rates ion 2004. Taking the 30 year fixed rate mortgage as base:
The year began at 5.88% .it gradually decreased by 0.3% till March and shot up in April after the close of the last quarter of 2003-04. The yo-yoing oil prices and the expectations of a healthy market growth shot the rates up to 6.42% in June, the highest for the year. June also witnessed a high in employment rate; it increased by 0.9% .Pulling more people into the home buying arena.
September saw the normalcy restored and the economy promising an expansion for the future.
With the presidential elections, the markets remained unsteady from August to November. The home market nose-dived by 13% .The exit polls settled on the knife edge between Bush and Kerry, the rates tottered and gradually settled at 5.83% for the year ending in December. The interest rates never fell or rose by even 1% throughout the year.


Americans favored the certainty of the fixed rate mortgages last year whereas there was a surge in the demand for ARMs throughout the world. About $1.6 trillion worth of homes were sold in the US, in spite of the delay in the sale of 600 homes in the third quarter due to the threat of hurricanes and land slides, which destroyed millions worth of property in 2003.
All in all the housing sales flourished. After the bursting of the dot com bubble and the terrorist attacks, America was isolated as ‘no-more-safe' place-rates rose and the financing sector suffered. But thinks have got a look up, a slow process though, the housing sector is sure to pick up steam in 2005 in spite of predictions of gradual growth in interest rates. The low inflation will not pressurize the rates much.

For 2005, the year has begun on a good note with the home sales front pretty strong.

For further information on mortgage and how to deal with the rates you can log onto:
http://www.mortgagefit.com
http://www.mortgagefit.com/fixed-adjustable.html
http://www.mortgagefit.com/arm.html
http://www.mortgagefit.com/fixed-rates.html