Banks fail to lower mortgage rates as Bernanke cuts
Bloomberg.com
Banks fail to lower mortgage rates as Bernanke cuts
Though they’ve received seven interest rate cuts and a program designed to kick-start borrowing,
banks are rebuilding their balance sheets rather than passing on the cuts to consumers in the form
of lower interest rates.
Keep this in mind . . .
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borrowing costs, but the average fixed rate has dropped only half a point. Last week, the rate for
a 30-year-fixed loan was 5.85.
With home sales continuing to fall, policy-makers have shaved 3 percentage points off of bank•
During 2001, the Federal Reserve acted 11 times to reduce rates by a whopping 4.75 percentage
points. Fixed rates fell to a record low of 5.21 percent in June 2003.
In 2000, the last time home sales fell year over year, interest rate cuts helped revive the market.•
would have to fall to 5.7 percent or less to stimulate a wave of home purchase or refinance
activity, according to one mortgage broker.
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Because they have been holding steady at just below 6 percent in recent years, interest rates