We have a real pogo stick now with mortgage interest rates. Up one week, down the next, then up again. Like the weather, wait a day and it will change. Today 11/06/08 Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 6.20% (6.10% in the southeast), down from 6.46% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.88%, down from 6.19% last week. A year ago the 30 year rate was 6.24%.
Indicators point to the job market weakening further. No surprise there. Seems like each night we hear about another corporation laying-off more and more workers. On a year-to-year basis, job layoffs doubled in October as compared to September.
Not only that, but consumers are hesitating to spend money in these uncertain times. I suspect that many forecasters are pondering whether this will affect the rapidly approaching holiday season when many stores make the majority of their profits. Thanksgiving, the official start of the Christmas shopping season is now less than three weeks away! My bet is that most consumers will be cutting back, at least some. Look in your local stores and you will see that many are already beginning to slash prices!
Seventy percent of lenders that offer prime loans tightened their lending standards, while 90% of those that offer more non-traditional loan products did the same. Of course, this shrinks the ranks of consumers who can get home financing. So far this year, only two of my home sales were financed. All of the rest were CASH! In our current market, cash is king for many sellers. For those buyers that have the money, or great credit, there are some wonderful bargains to snap up.
It will be interesting to see what effects the recent elections will have on the housing market and the economy in general. Maybe just the idea of a change in the wind will help get things moving in a more positive direction. Let's hope so!
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