With demands for purchase loans the highest they have been in 6 months, interest rates finally seem to have hit their low, halting a six week slide that ended around 3.71 percent. This is the lowest mortgage rates have been since 1971. Although requests to refinance accounted for eight out of 10 mortgage applications, demand for purchase loans were at the highest level in more than six months, the MBA said.
Mortgage rates are near historic lows in part because global investors see mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae as a safe haven from turmoil in financial markets.
Central banks around the globe are making plans to protect their currencies and economies from the impacts of an exodus of capital from eurozone countries,Reuters reports. Demand for U.S. dollars strengthens the currency’s value, which can hurt exports by making U.S.-made goods more expensive to foreign buyers.