By Lily Leung
Thursday, January 6, 2011 at 11:45 a.m.
U.S. mortgage rates dropped this week after two months of steady increases, said Freddie Mac officials Thursday.
The average 30-year fixed rate was 4.77 percent compared to 4.86 percent last week -- a dip some San Diego real-estate experts say is just part of the normal market fluctuations.
The current 30-year lending rate is still historically low, compared with the average at 5.09 percent during the same time last year and 6 percent at the height of the housing market.
The average 15-year rate also fell, from 4.20 percent to 4.13 percent.
This week's decreases are likely due to erratic trading in mortgage-backed securities, which drive mortgage rates, said Dan Williams, president of San Diego Lending Solutions in Mission Valley.
"Those bonds have been so volatile day-to-day," Williams said.
Leonard Baron, a real-estate professor at San Diego State University, isn't concerned about this week's rate fall.
"The market is functioning properly," Baron said. "Such a small amount is just irrelevant."
He said consumers should instead focus on the steady increases in the past two months, which he chalks up to an increase in consumer confidence.
Generally, local experts expect mortgage rates to remain steady throughout the year as the housing and job markets remain sluggish.
Although dips in lending rates could signal weaknesses in the economy, they are a good thing for potential homebuyers if they qualify for the loans.
"For every basis point that mortgage rates go up, that crowds out a small percentage of buyers," Baron said.
Source: SignOnSanDiego.com
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