DOW JONES NEWSWIRES
Half of borrowers who refinanced their mortgages in the first
quarter lowered their annual interest rate by at least 20%,
according to Freddie Mac's (FRE) quarterly refinancing report.
That comes despite the tight credit markets, which have made it
difficult for many consumers to get the approval to refinance. But
the big rate declines are amid come mortgage rates for conventional
30-year fixed-rate loans hitting 50-year lows in the period,
averaging 5.06%.
It has since continued to fall - Freddie Mac earlier Thursday
reported the average rate for such loans was 4.78% this week.
Freddie Mac Chief Economist Frank Nothaft said the payment
savings from refinancing done in the quarter is about $160 a month
on a $200,000 loan. He added if the pace keeps up for the rest of
the year, homeowners will save about $10 billion in mortgage
payments in their first year after refinancing.
The report said 58% of prime borrowers who refinanced a
conventional mortgage either kept the same principal balance or
reduced it, up from 45% in the fourth quarter.
The company saw a rise in the volume of home-equity loans and
lines of credit that were rolled into a new first-lien mortgage
during the quarter.
Nothaft said earlier Thursday the housing market may be edging
toward a bottom as existing-home sales for March stayed near their
four-month average and new-home sales beat expectations.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com