Today, 1/15/09, Freddie Mac just announced that the average mortgage interest rate for 30 year fixed-rate mortgages was 4.96% (5.03% in the southeast), down from 5.01% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.65%, up slightly from 4.62% last week. A year ago the 30 year rate was 5.69%. These are the lowest rates have been since the survey began. Will the rates falling below this benchmark finally get buyers off their duffs and get them to make a purchase? Rates are historically LOW and so are home prices. That is a great combination. Yet fears (mostly unfounded) about the future are keeping people petrified with fear. Perhaps this last drop added to the new president's arrival can break the logjam. Otherwise, some people are going to miss a lot of great opportunities that may never again appear in their lifetimes. Time will tell.
The money that the Federal Reserve and the US Treasury have added to the mortgage pot have helped to push interest rates downward for the past 11 weeks. Work is that the Fed will attempt to keep rates low by adding another $570 billion to the stew.
In December, unemployment increased to 7.2%, the most since January 1993. Over 2.6 million job disappeared in 2008. That was the biggest drop in over 60 years. Interest on Treasury securities fell and mortgage interest rates dropped followed suit.
With rates and home prices down, I strongly urge those of you who have been sitting on the sidelines to give some serious thought to now making your move. Trying to guess when the bottom will hit is tricky, and few can do it well. But, without a doubt, if you have cash or good credit, homes can be purchased and financed more cheaply now than has been the case for decades. I suggest you take a look and see what you can do to take advantage of this situation.
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