Last week the Freddie Mac's Primary Mortgage Market Survey showed some changes in the shorter term rates that decline several basis points. Where as the long-term mortgages did not show any changes despite of such big and unexpected drop in the Federal Funds Rate imposed by Federal Reserve during the 3rd week of September.



This week the average interest rate of 30-year fixed rate mortgage is 6.42 percent with 0.5 point. Compared to the last week's average rate of 6.34 percent with 0.5 point it has increased this week. Last year at this point of time, the average interest rate of 30 year fixed rate mortgage was 6.31 percent.

The 15 year fixed rate mortgage went up with 9 basis points to 6.09 percent with 0.5 point compared to 5.98 percent during the previous week. The 15 year fixed rate mortgage averaged 5.98 percent during this time of the last year.

The Freddie Mac's Primary Mortgage Market Survey quoted that the average interest rate of 5-year Treasury Indexed Hybrid Adjustable Rate Mortgages at 6.15 percent with 0.5 point. The average rate is lower than 6.21 percent with 0.5 point of the last week. Previous year, during this time the 5-year Treasury Indexed Hybrid Adjustable Rate Mortgages averaged 6 percent.

The 1-year Treasury Indexed Adjustable Rate Mortgages lost 5 basis points from the previous week and its average interest rate is now 5.65 percent with 0.6 point. During this time in the year of 2006 the average rate of 1-year Treasury Indexed Adjustable Rate Mortgages was 5.47 percent.

The data suggests that the average interest rate of the fixed rate mortgages have again started increasing and the average rate of the adjustable rate mortgages are cooling down. This could be a sign of back to normalcy of the credit market, but the experts referring to their calculations and predictions believe that credit market will take around a year more to get back to its normal position. Till then the ups and downs in the rates are going to be the only consistencies in the mortgage market.

According to the experts, the continuous decline of the credit market could have generated a terrible chain of decline in the Country's economic system. At that time, the Federal Reserve's cut down the Federal Fund Rate came as a source of relief. Though, it was surprising news, but this rate cut is one of the main reasons behind this little improvement in the credit rates.

Some other experts have a little dissimilar opinion. According to them, it is just a week's average rates and one can't analyze anything out of this. So it is very early to predict anything without proper analyzing.

Nothing seems to be going in the favor of housing market and the homebuilders yet. Until the credit market settles down it is going to be a long wait for real estate agents to see the pending home sales pick up again. So the housing market doesn't have anything to do except waiting for the credit crunch to end and mortgage market to stabilize again.