If you need assistance, please call 317-590-2901

Gov’t Shutdown Pushes Mortgage Rates Down

Monday, October 7, 2013   /   by Carlos J Higareda

Gov’t Shutdown Pushes Mortgage Rates Down


As a result of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week, Freddie Mac reports, ending at their lowest averages in nearly four months.

Retreating interest rates are generally good news for home buyers, however, the University of Michigan reports that overall consumer sentiment is at its lowest since April.

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 3: 

  • 30-year fixed-rate mortgages: averaged 4.22 percent, with an average 0.7 point, dropping from last week’s 4.32 percent average. Last year at this time, 30-year rates averaged 3.36 percent. 

  • 15-year fixed-rate mortgages: averaged 3.29 percent, with an average 0.7 point, dropping from last week’s 3.37 percent average. Last year at this time, 15-year rates averaged 2.69 percent. 

  • 5-year hybrid adjustable-rate mortgages: averaged 3.03 percent, with an average 0.6 point, dropping from last week’s 3.07 percent average. Last year at this time, 5-year ARMs averaged 2.72 percent. 

  • 1-year ARMs: averaged 2.63 percent, with an average 0.4 point, holding the same as last week. A year ago at this time, 1-year ARMs averaged 2.57 percent. 

The shutdown is having some impact on federal housing and mortgage programs. The Federal Housing Administration's Office of Single Family Housing is endorsing new loans, however, the IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts. Lenders often require such documentation from mortgage applicants, but some are adopting revised policies during the shutdown that will allow for processing and closings with income verification to follow. Fannie Mae and Freddie Mac have also adopted relaxed provisions on loans requiring a Form 4506T, allowing closings that are subject to tax transcript verification before the GSEs purchase the loans.

A recent Bloomberg survey of professional forecasters suggests that a partial federal shutdown lasting one week would shave 0.1 percentage points off of GDP growth in the fourth quarter and even more if the shutdown lasts longer. IHS Inc. estimates that the shutdown is costing the U.S. roughly $300 million per day in lost output.

Source: NAR, Freddie Mac

eXp Realty
Carlos Higareda
107 N State Road 135
Greenwood, IN 46142

The source of the Licensed Listings is BLC® listing service. The Licensed Listings are confidential information of BLC® listing service. The BLC® listing information is provided by the Metropolitan Indianapolis Board of REALTORS® from a copyrighted compilation of listings. The compilation of listings and each individual listing are © 2024 Metropolitan Indianapolis Board of REALTORS® All Rights Reserved. The information provided is for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All properties are subject to prior sale or withdrawal. All information provided is deemed reliable but is not guaranteed accurate, and should be independently verified.
This site powered by CINC: www.cincpro.com