After spending several weeks well below the 5% mark, today 12/24/09, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 5.05% (5.023% in the southeast), up from 4.94% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.45%, up from 4.38% last week. A year ago the 30 year rate was 5.14%. Just a few weeks ago they were at 4.71%. How many of you took advantage of that low rate??? I bet there are more than a few buyers or refinancers out there kicking themselves. Oh well, all things considered, just a smidge over 5% is still a historically fantastic rate!
Even though the rates went up this week they are still 1/2 of a percentage point below their high point for 2009, set back in June. The rates on adjustable-rate mortgages did not go up as much since many economic experts do not believe that the Federal Reserve will play with rates much in the next few months.
In the housing market, as seen in my two previous posts, the sales of existing homes have again gone up nationwide and my home state. In Florida that makes the 15th straight month of increases. Prices have gone down a bit more, on average. However, keep in mind that short sales and foreclosures play a big part of that downward trend, not the conventional resales. When you have condos that lost 75% of their values figured in that cannot help but pull down the total price average for sold homes. But short sale and foreclosed condos are not typical. To put it bluntly, it is kind of like when you get your septic tank pumped. The neighbors and your family are going to complain about the "scent", but it is not indicative of what your home is typically like. :)
But the fact that homes are moving is great since it diminishes the current inventory of homes that are out there for sale, and when inventory goes down, then prices can stabilize. The number of unsold homes on the market is now at the lowest point it has been since December 2006. Three years ago! And the current number of unsold NEW homes goes all the way back to the levels of the 1970's.
My question is whether or not the end of the tax credit will, or will not, have a major effect on the market and sales. Since I sell a lot of retiree homes, so far none of my customers have used the credit. Though I have one current deal that will likely allow its buyers to get the credit. Only time will tell on that one. In my opinion, if we can get employment moving back into positive territory and easy buyers' fears, we will still keep selling homes. Let's hope so for everyone's sake.
Do keep in mind that we are a very large country. So data that comes 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