Today, 5/27/10, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 4.78% (4.77% in the southeast), down from 4.84% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.21%, down from 4.24% last week. A year ago the 30 year rate was 4.91%. Lower interest rates help improve home affordability, along with reasonable home prices in may parts of the country.
Now Freddie Mac is saying what I have said in earlier posts. These incredibly low interest rates are helping make the loss of the home buyer tax credit easier to swallow. Prices are still low and these very low financing rates are making homes more affordable for more consumers.
Remember, the tax credit was a one-time gift and it did have a lot of requirements you had to meet to get it. Low mortgage interest rates are the "gift that keeps on giving" for years to come. And as long as you have good credit, anyone can benefit from the low interest, not just first-time buyers or current owners who had lived in their current homes long enough to qualify. Lower rates are good for everyone and the money you will save in smaller payments will make most of you forget the tax credit very quickly. Over the long term you will save some serious bucks!
For sellers, Freddie Mac is also saying that that indices of home prices are now showing that prices are either slowing their fall or are actually showing some small gains. After several years of what looked like a pricing freefall, this is positive news. Let's see if this trend continues into the future. If it does, buyers should take note since, though low interest rates are great, low prices can make that home more affordable. When prices begin to rise (and they will) the increase in cost will begin to offset the low interest rates. The perfect time to buy is when both interest rates and prices are low. That is now! It will not last forever. Eventually that pendulum will swing upward again. In the past it always has.
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