Mortgage standards that have kept many potential buyers out of the market are beginning to loosen. In addition, banks are speaking about increasing their mortgage business soon and shore up their residential mortgageassets within the next year.  All these prospective changes are being driven by a sharp rise in mortgage demand in conjunction with more home purchase applications being approved (60% compared to 55% of a year ago). This will combat but not fully eliminate the highly competitive home buying marketthat will still require standards such as 20% down.

“Fear Fannie Mae and Freddie Mac will force lenders to take back risky mortgages continues to be the primary condition constraining lending,” RealtyTrac reports. “Other conditions that have lenders holding tight to mortgage purse strings include obtaining insurance, slow economic growth, concerns about securitization, and processing capacity.”

Mortgage Squeeze Loosens, Somewhat,”

Data Shows Mortgage Credit Easing, Others Not so Sure

Here are the national averages for mortgage rates for the week ending May 16: 

  • 30-year fixed-rate mortgages averaged 3.51 percent, with an average 0.7 point, increasing from last week’s 3.42 percent average. A year ago at this time, 30-year rates averaged 3.79 percent. 
  • 15-year fixed-rate mortgages averaged 2.69 percent, with an average 0.7 point, rising from last week’s 2.61 percent average. Last year at this time, 15-year rates averaged 3.04 percent. 
  • 5-year adjustable-rate mortgages averaged 2.62 percent, with an average 0.5 point, rising from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.83 percent. 
  • 1-year ARMs averaged 2.55 percent, with an average 0.4 point, rising from last week’s 2.53 percent average. A year ago at this time, 1-year ARMs averaged 2.78 percent.