Mortgage rates fall sharply

Mortgage rates have fallen again.After rising to start the year, mortgage rates have declined once again, giving those looking at Houston homes more flexibility when looking to buy properties.

According to Freddie Mac (http://www NULL.freddiemac NULL.com/pmms/release NULL.html?week=9&year=2011), the average rate for a 30-year fixed-rate loan last week was 4.87 percent which is down from 4.95 percent the previous week. Rates for 15-year FRMs also fell, dropping from 4.22 percent to 4.15 percent.

"Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year's high set just three weeks ago," said Freddie Mac chief economist Frank Nothaft. "This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan."

However, Nothaft also expressed concern with demand in the housing market, with low levels of new home sales and two consecutive drops in the National Association of Realtors' Pending Home Sales Index.

The pending sales index dropped 2.8 percent in February to a reading to 88.9, which is 1.5 percent below the 90.3 mark of a year ago. However, it is still higher than most readings from late last year, when the market was recovering from the absence of the homebuyer tax credit.

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