Freddie Mac said Wednesday the average rate for 30-year fixed loans rose to 4.40 percent from 4.39 percent last week. Two weeks ago, the rate hit 4.17 percent, the lowest level on records dating back to 1971. The 15-year loan also increased, to 3.77 percent from 3.76 percent. It hit its lowest point since the survey began in 1991 two weeks earlier at 3.57 percent.

The yields pulled away from their yearly lows in the last two weeks as strong data eased economic fears and traders dumped bonds they bought ahead of the Federal Reserve's massive Treasury-buying program to boost the economy. Yields have fallen in recent days on worries over Ireland's debt crisis and tensions between North and South Korea.

The low rates did little to spur home sales, though, because would-be homebuyers are too concerned about their jobs or can't qualify for a mortgage. Others can't sell their home before buying another. In a hopeful sign, the Mortgage Bankers Association said Wednesday that applications for mortgages to buy homes rose to the highest level since May last week from the previous week. But new home sales dropped 8.1 percent to a seasonally adjusted annual rate of 283,000 units in October, the Commerce Department said Wednesday. The pace is just 2.9 percent lower than August's rate of 275,000 units, the worst level on records dating back to 1963.

The National Association of Realtors said Tuesday that sales of previously owned homes slipped 2.2 percent last month to a seasonally adjusted annual rate of 4.43 million units. The performance was weaker than had been expected.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day. Rates on five-year adjustable-rate mortgages averaged 3.45 percent, up from 3.40 percent. The five-year hit 3.25 percent two weeks ago, the lowest rate on records dating back to January 2005.

***taken from http://www.msnbc.msn.com/id/38770102/ns/business-us_business/

Homeownership has taken a justifiable beating lately. Housing prices have tumbled and sales are still declining. Markets are glutted with foreclosures from people who borrowed too much or lost a job and were unable to sell. And while your friendly Realtor will happily tell you about the opportunities this strife creates, buying a home for its appreciation possibilities is still an iffy venture, especially if you can’t or won’t give the market time to find its long-term footing.

But if you are looking for a place to live a while—and not a property to flip—buying remains the option that gives you both value and, yes, freedom.

Let’s strip away the big picture for a moment. It’s trendy to blame homeownership for the financial mess we’re in, but that’s like saying that eating leads to obesity. It’s not the act that causes the problem. It’s how poorly you do it—and banks and borrowers engaged in loans they shouldn’t have.

But for most of us, owning a home still makes financial sense. Lost in the pop of the housing bubble is some simple math: If you rent, you write a check and never see that money again. If you buy, and you’re prudent and patient about it, you probably will.

It’s called equity. If you’re paying $1,000 a month in mortgage on a standard 30-year fixed rate loan at, say, 5 percent interest—then $2,700 of those payments goes toward the principal of the loan in the first year. That means if you sell the home, you have to pay the bank $2,700 less than the amount you borrowed. The next year you’ll add $2,900 more to that total, and that annual number will go up each year. Plus, the interest you pay is often tax deductible.

If you rent, not only do you get less value by often paying more per square foot than homeowners, that hypothetical $1,000 each month is gone.

And for those renters who point to the supplementary expenses that come with homeownership, such as property taxes and insurance? If you believe your landlord isn’t passing those expenses on to you, then you probably think the car dealer really did throw in those floor mats for free.

Same thing for those household repair costs renters think they’re avoiding. Not only will you eventually pay in rent for the air conditioner that broke in your apartment, you’re also probably paying for part of the unit that died in one of your landlord’s other properties.

But beyond the repairs you have to do, the value of homeownership comes from the changes you want to make. If your carpet is worn or merely ugly, you don’t need permission to improve the place you live. You don’t have to split the cost for something that’ll raise the value of someone else’s property. You don’t have to worry that the landlord might subsequently cut corners with inferior workers or materials.

If you’re a tinkerer, you might be able to do some of these things yourself, which not only will improve your home’s value but make it a more personal investment. Owning a home, however, does not bring a lifetime sentence of fix-it-ups. If, like me, you’re not such a handyman, you can mow your lawn and call it a weekend. It’s your choice.

And choice is what homeownership brings. You can choose a neighborhood or street where you can put down roots without having to worry about a landlord selling your place or booting you out. You can choose a comfortable monthly payment without worrying that it’ll be bumped up in a year, and then maybe again the next year.

*taken from http://www.houselogic.com/news/articles/Homeownership-its-about-value-freedom-and-mowing/

By now, you have probably heard that mortgage rates are at an all time low!  This, in many cases, is very true.  Many companies are offering low rates which make it very appealing to home buyers in today's market.  According to the Federal Reserve Bank of New York, "Lower interest rates make it easier for people to borrow in order to buy cars and homes.  Purchases of homes, in turn, increase the demand for other items, such as furniture and appliances, thus providing an additional boost to the economy.  Lower interest rates mean that consumers spend less on interest costs, leaving them with more of their income to spend on goods and services.  If the rates that consumers and businesses have to pay to borrow rise too rapidly, however, spending may decline, leading to an economic slowdown."  (http://realtytimes.com)

In the 1980s, the interest rates on a 30-year fixed mortgage were up in the 16% range.  Today's average mortgage interest rate is at about 4.5%.  Lets put this in perspective for you.  If you were to borrow $100,000 with a 30 year fixed rate around 16%, your monthly payment would be around $1,400.  Now, if we were to borrow that same $100,000 at 4.5%, your new monthly payment is around $580.  That's a savings of $820.  If you looked at a $250,000 mortgage, the numbers are even more drastic.  The low interest rates coupled with the decrease in housing prices and the housing affordability index, provide tremendous buying opportunities out there.