Today, 8/4/2011, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 4.39%, down from 4.55% last week. The average interest rate for 15 year fixed-rate mortgages was 3.54%, down from 3.66% last week. A year ago the 30 year rate was 4.49%.
Reports are that the economy is weaker (thank you Congress for making a mess of the debt ceiling legislation - John Elwell's opinion) and this drove down the yield on treasury bonds. As usual, interest rates on mortgages followed them south. So this week, the average rate for fixed rated loans is markedly lower than it was a week ago.
The economy reportedly only grew 1.3% in the second quarter of 2011 and consumer spending fell 0.2% in June. The first decline in nearly a year. And of course, if people don't spend, companies don't produce. And if companies don't produce, they don't hire workers to make goods. And when there are less employees, there are less people who can buy products. A vicious cycle that apparently our federal government cannot seem to break.
Some good news is that there are still some signs that the housing market is continuing to firm up, though slowly. At least one index showed that prices had risen again for the 3rd month in a row. Could it be that the "bungee drop" is over and we are bouncing back? The National Association of REALTORS also reported that pending existing home sales were up for the second month. This is 20% higher than a year ago when those tax credits for homebuyers expired.
Of course, as I write this tonight I am watching news on CNN about the 500+ point drop if the Dow Industrial Average. Other indices also fell. In my opinion a lot of this is due to the fact that our folks in Washington, DC could not get their act together until the last minute and pass a bill to raise the debt ceiling. My bet it that this spooked both our markets and also those of foreign countries. The indecisiveness probably made us look less than "grown-up". As a result a trillion dollars of value just vanished from peoples stock portfolios. Gone, poof! One has to wonder what will happen by next week. Will this all blow over OR will our governments partisan bickering toss into even worse economic waters. I sure hope it is the former outcome, not the latter. We will see!
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.
I would also be happy to assist you in any way that I can. Just call JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. : 813-783-4444 or e-mail me at: firstname.lastname@example.org You are also welcome at my webpage: www.jelwell.century21bnr.com
John Elwell - REALTOR
Bill Nye Realty, Inc.
Licensed in Florida