The national average mortgage rate dropped to the lowest level seen so far this year despite experts’ fears that the credit downgrade would lead to a sharp increase in rates for all consumer loans, according to a report from the Washington Post. Freddie Mac, the government-controlled mortgage backing giant, said that the average rate for a 30-year fixed rate home loan dipped to 4.39 percent.
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However, some warn that though interest rates have fallen appreciably and could remain depressed in the near future, consumers shouldn’t expect that change to be permanent in the face of the lowered credit rating, the report said.
“Eventually the downgrade will catch up with Uncle Sam, and consumers and businesses will also pay higher rates,” Greg McBride, senior financial analyst for Bankrate.com, told the newspaper. “But for now, the weak economy remains front and center.”
In particular, both Freddie Mac and its counterpart, Fannie Mae, also saw their credit ratings downgraded by S&P, according to a report from the Wall Street Journal. Despite this action, Edward DeMarco, the acting director of the Federal Housing Finance Agency, said the government will continue to support the mortgage giants.
[Resource: The Ultimate Guide to Underwater Mortgages]