Rates on home loans see no relief from Fed cuts

The London News.Net
Sunday 4th May, 2008

Interest rates on U.S. home loans remain high despite serial cuts of official rates by the Federal Reserve.

Mortgages on 30 year home loans this week were still costing more than triple the current official interest rate, despite another 25 basis points cut in the Federal Funds rate on Wednesday.

Rates on 30 year loans in fact rose this week in the face of the latest Fed cut, taking their level to the highest in the past two months.

Major home loan lender Freddie Mac said 30-year fixed-rate mortgages averaged 6.06% this week, up from 6.03% the previous week.

A year ago, well before the subprime mortgage crisis blew up, 30-year mortgages were averaging 6.16%. Now, despite, seven reductions in the Fed Funds rate since September, the 30-year rate is just 10 basis points lower.

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