John's Florida Real Estate Blog

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5 Week Mortgage Interest Rate Decline Ends on Wall Street Worries

Uparrow Due to the woes on Wall Street that showed up last week and the fact that Washington has yet to find a solution, interest rates on fixed-rate mortgages jumped after falling for 5 consecutive weeks. Today 9/25/08 Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 6.09% (6.11% in the southeast), up from 5.78% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.77%, down from 5.35% last week. A year ago the 30 year rate was 6.42%.

How many of you took advantage of these very low interest rates and low home prices, and finally bought that new home? How many others were still "waiting for interest to reach the bottom"? That is an impossible thing to determine. Even the best stockbrokers cannot predict when a stock has reached it lowest price. They buy when it is "low enough". Then if it goes lower they buyer some more, and on and on. Those home buyers that did not buy last week or lock in a loan rate should check the difference in what they would pay over 30 years using first a 5.78% interest loan and then a 6.09% one. And what will next week bring? Washington lawmakers will greatly influence that.

In the 3rd quarter of this year housing still shows some "softness" in sales and prices. Nationally, in July home prices fell 5.3% from a year before. According to National Association of REALTORs data from August 2007 to August 2008 the median price of existing single-homes (no condos or coops) fell 9.7%. Though the Florida Association of REALTORS saw some bright spots. (See preceding post). Overall seasonally adjusted resales fell 2.2% from July to August.

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

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 2 commentsJohn Elwell • September 25 2008 06:36PM

Comments

John,

I like what you have to say about looking for the bottom.  It's not a buyers market until you buy!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) about 10 years ago

Mike, I always tell people when the price is "low enough" for them, buy. It may go lower, but it can just as quickly go up. And that is what is happening now with interest rates. If someone had locked in a rate a week ago they would have saved a ton of cash over the life of the loan. Now things do not look as good. And next week could be worse. At the very least, requirements for loans are tightening up and that alone will put people out of the market. Oh well, we try to warn them anyway.

Posted by John Elwell (CENTURY 21 Bill Nye Realty, Inc.) about 10 years ago

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