It’s a funny thing. Even though banks savings rates are lower than a Greek pensioner’s spirits right now, Americans haven’t lost faith in bank investment deposits.
The Los Angeles Times reports that Americans have about $5.06 trillion in traditional bank savings accounts at the end of May 2010. That’s up $209 billion from the Jan. 1.
As The Times aptly points out, most of those bank deposit accounts are paying yields less than 1%. The average U.S. bank savings account rate is down to 0.213% this week, as measured by the BankingMyWay Weekly Savings Rate Tracker.
The average money market fund isn’t doing much better. The BankingMyWay Weekly Money Market Rate Tracker is only at 0.316% this week.
What does that tell you? It tells you that Americans are hoarding cash — big time. With the stock market off roughly 1,000 points since its early May high, investors are hanging onto their money with a Vulcan death grip.
That’s particularly true of affluent Americans, who have 48% of their total assets in cash accounts, up from 44% in 2007 (hat tip to Boston Consulting Group for those numbers). The thinking goes in upper-class parlors and at middle-class kitchen tables alike, the game today isn’t making money — it’s not losing it.
Aside from the flight to safety issue, the other big news related to mortgage rates this week comes from the housing market, where RealtyTrac is out with new foreclosure numbers. The firm reports that the total bank repossession activity rose to a record level in May, at more than 300,000.
The good news is that foreclosure activity seems to be abating in key areas like California, Nevada, Arizona and Florida. Hey, good news is hard to come by when it comes to Americans losing their houses, so we’ll take any silver lining we can get these days.
For the week, the popular 30-year fixed-rate mortgage really hit the skids, falling from 5.081% last week to 4.875% this week. Overall, the BankingMyWay Weekly Mortgage Rate Tracker looks like this:
Description This Week Last Week
One-Year ARM 4.459% 4.341%
Three-Year ARM 4.282% 4.219%
Five-Year ARM 3.952% 4.189%
15-Year Mortgage 4.329% 4.519%
30-Year Mortgage 4.875% 5.081%
At 4.875% for a 30-year mortgage, Americans with good credit and enough of a cash down payment, can get an unbelievable — there’s really no other word for it right now — deal on a new home.
For some direction in finding the lowest rates possible, visit BankingMyWay’s Mortgage Rate Search. Week-to-week, it’s your best bet for finding the best mortgage rate deal possible.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.