Today, 3/26/09, Freddie Mac announced that the average mortgage interest rate for 30 year fixed-rate mortgages was just 4.85% (4.86% in the southeast), down from 4.98% a week ago. The average interest rate for 15 year fixed-rate mortgages was 4.58%, down from 4.61% last week. A year ago the 30 year rate was 5.85%. Freddie Mac says this is the lowest that 30 year interest has been since they started doing the survey way back in 1971!
The Federal Reserve said it would begin buying Treasury securities over the coming 6 months. This caused bond yields to drop and interest rates on mortgages played follow-the-leader downward.
Freddie Mac noted that on July 24th the rates were at 6.63%. The difference between then and today would mean that someone with a $200,000 mortgage would pay about $225 less each month due to the drop in interest rates. That is a big savings! Think of what you could do with an extra $225 in your pocket each month, especially in these tough times.
It seems that many buyers are taking notice of the lower rates. Both sales of existing and new homes rose 5% in February 2009. Over half of the buyers were purchasing their first homes. Also, applications for new mortgages rose for three straight weeks. Again the lower rates likely fueled this action.
Hopefully some of my readers will be able to take advantage of these extremely low rates, special first-time buyers tax credits, and the very low prices of homes. Now is a great time to buy a home! So jump down off the fence and make that move before rates and prices go back up. And THEY WILL!
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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