Today, 12/16/10, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 4.83% (4.82% in the southeast), up from 4.61% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.17%, up from 3.96% last week. A year ago the 30 year rate was 4.94%.
Instead of creeping, rates are taking bigger jumps and are closing in on the 5% mark. Hopefully, many of you are taking advantage of rates that are still historically very low to purchase a home or to refinance your current loan. It was not that long ago when interest rates were much closer to the 4% mark.
Freddie Mac said that since the economy was showing more strength, there was a growing fear that inflation could rear its head in the near future. That helped bond yields increase and mortgage interest rates went along for the ride. Kind of a two-edged sword. Nice that the economy may be improving, but not so nice that the "bargain basement" interest rates could be a thing of the past, at least for now.
If you read any of my posts from months and years past, you saw that I noted that we were in a very unusual situation where BOTH home prices AND interest rates were low. That is rarely the case. Normally, when prices are high, interest rates are low. And conversely, when interest rates are high, home prices are low. To have both of these items low is not the norm.
In addition, Freddie Mac reported that industrical production showed a big gain in November. The biggest since last July of this year. Consumer sentiment also rose in December to a six month high. Overall good economic news.
Here in Zephyrhills, our winter visitors are returning, and that means more sales in the area. We are seeing more floor traffic in our offices, more visitors to my websites, and an increase in the volume of phone calls/e-mails. Though it is winter here, things are heating up!
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