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Freddie Mac: Fed Interest Rate Drop Helps Lower Mortgage Interest Rates

By
Real Estate Agent with CENTURY 21 Bill Nye Realty, Inc.

Today 3/20/08,  Freddie Mac reported that the average mortgage interest rates for 30 year and 15 year fixed-rate interest rates have dropped. Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 5.87% (5.84% in the southeast), down from 6.13% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.27%. down from 5.58% last week. Pretty good decreases. So again both the 30 year fixed-rate and the 15 year fixed-rate mortgages are below 6%.

A man called me today to complain that interest rates were up and things were terrible. Well, rates under 6% look pretty good to me. And they are. Many of you can remember mortgage interest in the 1970's that was nearly 20%! Now 6% looks pretty good. Home prices are still low as well. That is good for home buyers, and in a round-about way, good for sellers as well, especially if they have owned their homes for more than 4 years or so.

Various things happened this week to help the rates drop. Inflationary pressures were determined to be weaker than had been predicted. The Consumer Price Index (CPI) remained unchanged for the first time since November 2006.  And as many of you heard in the news or here on the blog, the Federal Reserve cut its funds rate by 0.75% based on slowing consumer spending and poor employment news.

The combination of all of these factors worked together to force interest rates down this week. The Fed has indicated that it will take further action if it appears to be necessary.

Later in the spring we are all supposed to get a check from the government that is supposed to spur on the economy. However, as far as the housing market goes, I do not think that a check worth from $600 to $1,200 will have any effect at all. It is too little, too late at this point. Something to protect persons with unbearable mortgages might be a better route. A one-time infusion of a little cash is unlikely to help these troubled homeowners in the long run.

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.

Posted by

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

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