Happy Holidays, Everyone! It was a Christmas gift indeed when rates fell again this week, encouraging buyers and sellers alike and giving hope to those folks feeling strapped by high mortgage payments who want to refinance their loans. This is the latest information on mortgage rates reported by Tom Petruno in the L.A. Times on 12/12:
"Mortgage rates are down for a sixth straight week, a sign that the government's latest efforts to break up the credit market logjam are working. The average 30-year fixed home loan rate fell to 5.47% this week -- a four-year low -- from 5.53% last week, mortgage giant Freddie Mac said. The rate has tumbled from 6.46% at the end of October. U.S. regulator James Lockhart, whose agency oversees Freddie Mac and Fannie Mae, said Wednesday that the government's programs to ease the credit crunch could push mortgage rates "well below 4%," the Associated Press reported. But Lockhart didn't give a timetable for that kind of drop. Home loan rates fell quickly beginning the week of Nov. 24. That was when the Federal Reserve said it would commit $600 billion to buy mortgage-backed securities of Freddie, Fannie and other U.S. agencies..."
What does that mean to the consumer in a market that has frightened buyers and depressed sellers?
As stated in the California Association of Realtors article entitled "Why Buy a Home in Today's Market? (certainly a question we have all been asking): "Interest rates on long-term, fixed, and adjustable mortgages are at historically low levels. The rate on a 30-year, fixed mortgage is hovering below 6 percent [note: even lower rates today], while, by comparison, interest rates were hitting 8 percent and higher during the last market downturn in the late 1990s, and were between 10 and 12 percent at the height of the last housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and your monthly payments are more affordable.
Buyers, now is the time to pick up bargains on homes you never could afford before. For those of you with good credit and a solid down payment, lenders are still offering great loans at great rates; and don't forget that those who qualify for FHA loans can still get in with a greatly reduced down payment of as low as 3% depending on the price of the home to be purchased. And sellers, take heart, buyers are knocking on doors again, so if you are ready to make a reasonable deal, they are still happening everywhere. And that news is my gift to all of you. Have a blessed Holiday season!