Mortgage rates slide to lowest point since '68

August 20, 1993|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

For homebuyers, the 1960s are back.

Mortgage rates this week slid to levels not seen in a quarter century, and industry experts predicted an imminent break below the 7 percent barrier.

"There is no defined bottom for this market," said Dan Segal, assistant vice president for Mortgage Capital Investors of Rockville. "We'll be down to the 6's in a year if this continues."

The average rate in the Baltimore area is 7.07 percent with an average of 1.51 points, according to HSH Associates of Butler, N.J., which tracks mortgage rates. But homebuyers, if they shop around, can find 30-year mortgages at 7 percent interest plus 1 point or less.

The drop to 7 percent may also push hesitant buyers to finally take the plunge, and revive a less-than-stellar real estate market.

"It's going to make houses much more affordable," said Pat Porter, branch manager for Prosperity Mortgage in Baltimore.

"There are going to be a lot of people sitting on the sidelines at the point of saying, 'Now's my time,' " she said.

Fletcher Hall, executive vice president of the Greater Baltimore Board of Realtors, added: "I think it will have some effect. This year the market has been a good market, but not great. This will help sustain it for the fall season," traditionally a slower selling period.

As of yesterday, the national average rate for a 30-year fixed mortgage dipped to 7.10 percent from 7.17 percent a week ago.

Adjustable-rate mortgages followed the same downward trend, dipping from 4.51 percent to 4.45 percent, the Federal Home Loan Mortgage Corp. reported.

The last time rates were this low was 1968 -- when the average for the year was 6.63 percent.

Ms. Porter said rates will fall below 7 percent and possibly as low as 6 percent. The fall will create a surge of refinancings, she predicted.

But Mr. Gumbinger said rates would not likely fall much more: "We'd have to see a new serious round of economic weaknesses," Mr. Gumbinger said. "Mostly the economy's been limping along."

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