Today, 9/23/10, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 4.37% (4.38% in the southeast), unchanged from 4.37% a week ago. The average interest rate for 15 year fixed-rate mortgages was 3.82%, also unchanged from 3.82% last week. A year ago the 30 year rate 5.04%. Fixed "in cement". But when the rates are this low, that is a very good thing! Right?
Freddie Mac's chief economist said that low employment coupled with a lower than expected risk of inflation helped relieve any upward pressure on interest rates. Thus, they are pretty stable at their current low levels.
He also said, "Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession; the one exception was the 1980 downturn. The National Bureau of Economic Research recently announced that the current recession ended in June 2009. Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September."
But without a doubt, this real estate agent firmly believes that at some point, not all that far off, either interest rates or home prices will start to move upward again, and the current historically unique "buyers market" will come to an end. The question is, "How many buyers will take advantage of it, and how many will wait just a little too long?" It will not last forever. Things will return to normal at some point. When? Who knows?
Do keep in mind that we are a very large country. So figures that come out for the entire nation, may have little or no relevance for your particular area. In the end, it is best if you speak with a local REALTOR or financing expert to see what the situation is for your part of the United States. Florida is not Michigan, nor is Maine the same as California. Market conditions can be very different from place-to-place. Also, your own credit history, the property you want to buy, etc. will effect your specific loan options and interest rates. Your mortgage broker or bank loan officer can give you more specific information.
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