Today 8/20/09 Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 5.12% (5.11% in the southeast), down from 5.29% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.47%, down from 4.68% last week. A year ago the 30 year rate was 6.47%.
Interest rates fell to the lowest they have been since last May due to a corresponding fall in Treasury Bond interest rates. Some Adjustable Rate Mortgages (ARM's) fell to levels we have not seen in nearly 5 years!
These low rates, probably coupled with government tax credits and lower home prices, help to support our housing market and make homes more affordable. According to the National Association of Home Builders, builders are feeling much more optimistic about the future. As I reported in recent posts, new construction on single-family homes is up. Apparently for the 5th month in a row.
These are all positive signs. But some buyers and sellers are still hanging back. Why? In my opinion uncertainty about the future. Even those with good jobs have an uneasy feeling about the future. Will I be fired? Will my hours be cut? Will my pension fund become defunct? Will that stock I own become worthless? Many of these are baseless, but as I learned long ago, people act on their perceptions much more than they do on the reality of a situation. Once people begin to perceive that that the future is more likely to be better than worse (or at least more certain), they will begin to make the housing market move. Question is, will this be like an icicle dripping off the eaves, little-by-little? Or will the pent up mass of home sellers and buyers come pouring out like an avalanche? No predictions from me on that one.
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