Mortgage Rates In Mail Solicitations Drop: Study
The Federal Reserve System’s rate cuts are having an effect – on direct mail solicitations for mortgages. According to a new study, the average rate offered for fixed-rate mortgages during the first quarter of 2008 was 6.22%, a drop from the 7.14% average seen during fourth-quarter 2008.
“Fixed rate mortgage pricing stayed stable in direct mail during 2007, but we’ve seen a huge drop in rates since then,” said Farah Huq, senior analyst at Mintel Comperemedia, in a statement.
Huq continued, “Lenders are capitalizing on today’s attractive, low rates and trying to lure in business by promoting them.”
Because fixed rates are low, and the economy still faces uncertainties, Mintel, which performed the study, anticipates that lender will increasingly promote fixed rate offerings over variable rate mortgages. During the first quarter, nearly all such offers were fixed rate, compared with 84% a year ago.
Rates aren’t the only thing that is falling. The number of mortgage pitches declined from 261 million offers during fourth-quarter 2007 to 218 million in first-quarter 2008.
