Today Freddie Mac reported that for a third week in a row the mortgage interest rates have inched down. Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.63% (6.56% in the southeast), down from 6.67% a week ago. The average interest rate for 15 year fixed-rate mortgages was 6.30%, down from 6.34% last week.
Moderating core inflation rates were given as a cause of the lower rates. In fact the Federal Reserve mentioned this moderation of the core rates as the basis for leaving the target federal funds rate unchanged. As many of you know, inflation is a main worry of the Federal Reserve and often helps them determine whether they will raise or lower their interest rates. That is how they help prevent runaway inflation from taking place like it once did in the early 1970's.
Their concerns were lessened due to reports that May's personal consumption expenditures were within a range that does not set off alarm bells at the Fed. They are taking a wait-and-see attitude about whether the moderate rates of inflation will continue or not. If they begin to become uneasy about the trends they see, we could see the mortgage interest rates begin to climb once again. In my opinion, interest rates are still historically low and show encourage home buyers to make a move. Especially since they will be saving money due to the price reductions that we are seeing from developers and sellers of resale homes.
Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.
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.
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