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Mortgage Rates Still Historically Low – Home Sales Continue to Rise

By
Real Estate Agent with RE/MAX Advantage

More of the same...but more of the same is now good news. While mortgage rates are still maintaining historic lows - a 30 year fixed-rate mortgage averaged 5.14 percent last week - home sales are still showing gains. Experts are saying that low mortgage rates are helping to stabilize the housing market by encouraging prospective buyers to take action while the rates remain low.

While rates did rise slightly - the average for the week prior was 5.12 percent - compared to last year, home loans are a steal. Last year at this time, the average rate was 6.4 percent.  Mortgage rates contribute largely to home affordability. A few percentage points can mean a big difference in a monthly mortgage payment.

Likewise, new home sales continued to increase, showing a gain for the fourth consecutive month. It's obvious that something's working, whether it's new home buyers taking action to take advantage of the $8,000 tax credit before time runs out, or if low housing prices combined with low interest rates are simply finally doing the trick.

According to the Commerce Department, the number of new home sales has now reduced the number of unsold new homes on the market to the lowest number since 1993. This can't be attributed solely to new home sales, however. We do have to consider the fact that builders have drastically slowed their pace to accommodate the lack of demand.

According to the National Association of Realtors, existing home sales also showed an increase for the fourth consecutive month. We've now reached an annual pace of 5.24 million, which is the most since August 2007. Strong signs of improvement.

Prospective home buyers - it's time to sit up and take notice. Home prices are showing slight increases, which is great news for those hoping to sell their homes, but means we are now beginning to see the end of this opportunity to get a great deal on the Boise property of your dreams. There are still plenty of foreclosures on the market, but if you're a first time homebuyer, you should be acting quickly to be eligible for the $8,000 tax credit.

Boise real estate was once a strong player in the national market, and will be so again. Why let investors have all the fun?

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