Today 1/17/08, Freddie Mac reported that the average mortgage interest rates for 30 year and 15 year fixed-rate interest rates dropped AGAIN! Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 5.69% (5.65% in the southeast), down from 5.87% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.21%. down from 5.43% last week. Last year the 30 year rate was sitting at 6.23% and went even higher during 2007. The 15 year fixed-rate interest was at 5.98%. Needless to say, we have seen some serious drops in the past several weeks.
Downward pressure on interest rates came from lackluster retail sales in November and December. Especially in the areas of building supplies and garden/lawn equipment (what a surprise in the middle of winter?).
The drop in interest rates was apparently across the board and affected all types of loan products, fixed-rate and adjustable-rate products. Freddie Mac says that for the first time in several years, the interest rate on a 15 year fixed-rate mortgage is actually lower than that of a 1 year adjustable-rate loan.
Repeating what I mentioned in last week's report, with interest rates and home prices BOTH at low levels, this is a time for buyers who have been sitting on the sidelines to think about making a move. At some point either interest rates or home prices will start to rise, perhaps significantly. Both have lower limits below which they cannot practically go beyond. For example, developers will not build and sell homes that they cannot sell for enough money to cover their costs. Have we reached that point? In my opinion, we are close to it, if not already there. Do not wait too long or you might miss out on some great deals.
Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.
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.
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