Buyers looking for lower mortgage rate are not having much luck these days. Even as the Fed aggressively cut a key interest rate several times this year, mortgage rates have been slow to respond.

According to a report from Freddie Mac issued last Thursday, the rate for a 30-year fixed-rate loan has remained at over 6 percent since the Fed started cutting rates to help rekindle the real estate market nationwide. Normally, as the Fed lowers interest rates charged to banks and lenders, these groups will pass on the savings to consumers, resulting in lower mortgage rates.

However, this time the market isn’t responding the way it should. Many mortgages are packaged into marketed securities and sold to overseas investors. However, the recent rash of problems surrounding subprime loans in the U.S. housing industry has many investors spooked. As a result, many are unwilling to purchase securities backed by mortgages at a low interest rate.

Also, worries about inflation are leading many investors to demand higher rates. As the weak dollar leads to higher prices for oil and commodities, homebuyers will have to pay a higher rate to keep up with the current level of inflation.

However, if you’re looking to get in the North Shore Chicago Real Estate market, a 6 percent mortgage just isn’t that bad.

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This entry was posted on Tuesday, June 10th, 2008 at 8:09 am and is filed under Evanston Real Estate(t) . You can leave a response.