This was a great week for borrowers locking in their rate - rates plunged almost half a point. Rates are below 6 percent. Several loan officers I spoke with yesterday said that they saw rates as low as 5.75 percent with no points.
Why did rates suddenly plunge? They plunged due to the Fannie Mae/Freddie Mac take-over by the Feds which brought some much-needed calm and (some) stability to the market. Now that the Feds are running Fannie and Freddie, GSE mortgage-backed securities are more appealing to investors. That effect is felt by you and I in the form of lower rates.
What will rates do in the short to mid term? Many are expecting rates to stay at or below 6 percent through the end of the year (and the election).
What affect does this have on the real estate market in Loudoun County? We should see a tick up in buyer demand as buyers take advantage of the very low mortgage rates and prices. This summer saw less inventory and greater buyer demand and this trend should accelerate this month and next due to the even lower rates.
Source: Darran Anthony, Suntrust Mortgage and BankRate.com
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