Today 4/24/08 Freddie Mac reported that after several weeks of no upward movement of mortgage interest rates and with the average rate well under 6%, average mortgage interest rates for 30 and 15 year fixed-rate loans have moved upward once again. Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.03% (6.00% in the southeast), up from 5.88% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.62%, up from 5.40% last week. A year ago the 30 year rate was 6.16%.
How many of you were waiting to see if the rates had bottomed out? As many stock investors find out, knowing exactly when a market has bottomed out is a difficult thing to do. Sometimes you have to take a low market that looks good and make your move. Otherwise you risk having the market do an about-face on you and start back in the wrong direction. Some buyers are doing the same thing with house prices. They are betting that the home prices will drop further. Even though they are now often less than $100/square foot, a price that was common before the last hot market began, buyers wait on and on hoping they will go even lower. At some point, the prices will start back up again, and they will wish they had moved. Catching the market when it is at its absolute lowest is nearly impossible. Close to lowest is often good enough. In my area we are seeing inventories slowly drop and demand picking up a bit. At some point prices will follow interest rates and begin to climb again. If both interest and prices rise, that will truly be a double whammy.
The latest rise in interest rates is due to inflation fears. The Producer Price Index rose 1.1% in March. That was double what the experts had predicted.
It was also revealed that it now appears less likely that the Federal Reserve will drop interest rates substantially at its next meeting. Some of you that are waiting may want to speak with you lender or mortgage broker and find out what a half percentage point increase will cost you each month and over the life of your loan. You may be surprised.
If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac and offer a lot of useful information for consumers.
If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be, should you decide to finance a home purchase.
John Elwell - REALTOR
Bill Nye Realty, Inc.
Licensed in Florida