In a bit of a fix

The average mortgage rate on a 30-year fixed loan in the USA has fallen to five per cent, its lowest record in years, according to mortgage firm Freddie Mac....

The fall in mortgage borrowing costs suggests that the Federal Reserve's plan to prompt lenders to reduce mortgage rates by slashing interest rates and vowing to buy back £360 billion mortgage-backed securities is working. Mortgage rates peaked at 6.7 per cent last summer.

In an interview with the New York Times, Orawin Velz, Vice President for economic forecasting of the Mortgage Bankers Association, said, "Since the Fed announced they would buy mortgage-backed securities, we have seen a pretty healthy increase in refinance applications, while purchase applications have trended up, but not as significantly."

Source: www.homesoverseas.co.uk/news