About this time a year ago, I was pointing out that with local mortgage rates at near historic lows, the opportunities for first time home ownership had seldom been better. Although, as always, there is a lot more to a family's decision than the cashflow dimension, it's undeniable that those who took advantage of low mortgage rates in 1993 could look forward to spending the next 30 years making the their friends and neighbors feel like they'd missed the boat. When you are paying 6.8% for your home while yournext door neighbor -- who bought just one year later -- is struggling at 9.2% every month, it's no wonder your car looks a lot newer. And why you're always jetting off to exotic vacations while they check out the latest “staycation” bargains.
That was what was happening a year ago, but this year is different. I can no longer tell you that mortgage rates are at near historic lows.
That's because July, mortgage rates hit absolute historic lows!
According to Freddie Mac'sPrimary Mortgage Market Survey, 30-year fixed-rate mortgage rates (FRM) averaged 3.62%. There were other bottom-scraping stats in the same report, including the average of 0.8 point (with an asterisk that points out that closing costs vary); but the real headline-maker was that further drop in mortgage rates. Down from 4.6% a year ago. That's an all-time low in Freddie Mac records - and they go back to 1971.
"Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows," said Freddie Mac's chief economist, Frank Nothaft, quoted in the July 5 release.
You can bet that Nutley buyers and sellers are listening. If previous talks of a housing recovery haven't been enough to motivate first-time buyers or investors to jump into the market, mortgage rates like these often do the trick. And if you are on the oppositie side of the home-selling equation, weighing the best time to sell your Nutley home, this might be the signal you've been waiting for. Record-breaking low mortgage rates (and corresponding headlines) can help breathe life back into any market, including Nutley home sales. Properties that are properly priced and well-marketed stand the best chance of taking advantage of an invigorated market.
Every market is different, and often vary from neighborhood to neighborhood. Call me if you want to chat about market updates and how they might affect your individual outlook.
Matthew De Fede SFR & CNE
COLDWELL BANKER Residential Brokerage