After last week's drop, did any of you investigate locking in an interest rate? Or did you gamble on rates falling more? If you bet on the latter scenario, you lost. Today 7/24/08 Freddie Mac reported that average mortgage interest rates moved significantly higher due to inflation worries. Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.63% (6.61% in the southeast), up from 6.26% a week ago. That is the highest it has been for quite a while. Another jump like that and we will be over 7%!! The average interest rate for 15 year fixed-rate mortgages was 6.18%, up from 5.78% last week. A year ago the 30 year rate was 6.69%.
A Freddie Mac spokesperson said that inflation worries, the probability that the Federal Reserve would raise interest rates, and the further weakness in the housing sector worked together to cause this large jump in mortgage interest rates. Over the past year inflation has been 5%. If you filled your car lately, I bet you can guess what is pushing that number higher.
Nationally (keep that word in mind) housing prices fell 4.8% from May 2007 to May 2008. And the construction of one-unit homes fell to just 604,000 in June, the lowest rate since 1991.
Locally we are seeing some more action than we have in the past. Today I was ready to toss the phone out of the car to keep it from ringing. In recent years we are seeing that many people who are looking for winter vacation homes are now coming down to Florida in the summer to do their shopping, mostly in late July and August. That could be what is happening now. It is my personal belief that we will see a recovery here in Florida before we see the same occur in the northern climes. Lots of baby boomers like me still remember our spring breaks in Florida, and now many of them are coming down here to enjoy their second childhoods and increased leisure time.
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 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