Christmas has arrived early this year for anyone needing a mortgage in the near future.  

Mortgage rates have been well below 5 percent this week and have been easing for the past four weeks.  These are historic lows for home buyers who are able to take advantage of them. 

30-year fixed rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending November 25. That was down from 4.83 percent last week and 5.97 percent a year ago.  Rates like this have not been seen since 1971. 

Freddie Mac has also reported that the average rate on a 15-year fixed-rate mortgage averaged 4.29 percent this week, down from 4.32 percent last week.  A year ago the average for a 15-year loan was 5.74 percent. 

Part of what has been driving this has been the Fed's goal to purchase up to $1.25 trillion in mortgage-backed securities in an attempt to lower rates and loosen credit.  This program had originally been planned to end this year but will now be extended until March of 2010. 

The good news, of course, is that mortgage rates are low.  However, the Mortgage Bankers Association has projected that 30-year fixed-rate mortgages will probably hit 5.4 percent next year, 6 percent in 2011 and, possibly 6.3 percent in 2012. 

Numerous factors have come together this season to improve home affordability. Generous tax credits for all home buyers who meet eligibility requirements will be available until April 30.  Home prices are down with foreclosure properties putting the pressure on prices even more.  And, low mortgage rates make it all pretty tempting.

Is short short-time speculation advisable?  Probably not.  But if you are looking to buy a home to live in for the long-term, at least five years or more, it's difficult to argue that this is not an excellent time to take that leap. 

Copyright 2009 - Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

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