Mortgage Rates are Low - But are Not Expected to Stay that Way

By
Real Estate Agent with The Buyers' Counsel

House on moneyChristmas has arrived early this year for anyone needing a mortgage in the near future.  

Mortgage rates have been well below 5 percent this week and have been easing for the past four weeks.  These are historic lows for home buyers who are able to take advantage of them. 

30-year fixed rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending November 25. That was down from 4.83 percent last week and 5.97 percent a year ago.  Rates like this have not been seen since 1971. 

Freddie Mac has also reported that the average rate on a 15-year fixed-rate mortgage averaged 4.29 percent this week, down from 4.32 percent last week.  A year ago the average for a 15-year loan was 5.74 percent. 

Part of what has been driving this has been the Fed's goal to purchase up to $1.25 trillion in mortgage-backed securities in an attempt to lower rates and loosen credit.  This program had originally been planned to end this year but will now be extended until March of 2010. 

The good news, of course, is that mortgage rates are low.  However, the Mortgage Bankers Association has projected that 30-year fixed-rate mortgages will probably hit 5.4 percent next year, 6 percent in 2011 and, possibly 6.3 percent in 2012. 

Numerous factors have come together this season to improve home affordability. Generous tax credits for all home buyers who meet eligibility requirements will be available until April 30.  Home prices are down with foreclosure properties putting the pressure on prices even more.  And, low mortgage rates make it all pretty tempting.

Is short short-time speculation advisable?  Probably not.  But if you are looking to buy a home to live in for the long-term, at least five years or more, it's difficult to argue that this is not an excellent time to take that leap. 

Copyright 2009 - Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

Your Excusive Buyer Broker for Massachusetts Since 1992 

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Rainmaker
1,607,599
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

They are low but harder to get, would you agree. We are not really having any trouble though.

Nov 25, 2009 02:27 PM #1
Rainmaker
403,671
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Joyce:

You are correct on that.  Right now you do have to have decent credit and at least a 10%  to 20% down payment.  For those who do, I think it's a great opportunity.

 

Nov 25, 2009 02:30 PM #2
Ambassador
988,927
Steve Shatsky
Dallas, TX

Hi Claudette... Now really is the time to buy a home.  I can't see how it's going to ever be much better than it is currently.  

Nov 25, 2009 02:37 PM #3
Rainmaker
356,921
Doug Jones
Mortgage Magic - San Jose, CA
Mortgage Broker - NMLS 286668

Even the 6.3 is excellent...I remember 18%

Nov 25, 2009 02:39 PM #4
Rainer
67,073
Alexandria Virginia
Featuring Susan Craft, CRS, REALTOR® - McEnearney Associates - Alexandria, VA
Real Estate Editor

we're in for a surprise when the Fed decides to push rates up to address the national debt.  We will see double digit rates over the next few years, like we did in the early 80's

Nov 25, 2009 07:29 PM #5
Rainmaker
403,671
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Hi, Steve:

This is certainly the lowest I have ever seen. I agree, I can't imagine there being a better time to buy than right now.

Doug:

18% - That certainly puts things into perspective, doesn't it?

Susan:

I hope that does not happen, but I guess we have to consider it as a possibility.

 

Nov 25, 2009 11:51 PM #6
Ambassador
3,097,706
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Claudette:  It's amazing how LONG that mortgage rates have been low.  I feel like there will be a riot in the streets if they ever go up over 5.5% again, but you know this can't last forever.

Nov 26, 2009 02:13 AM #7
Rainmaker
403,671
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Chris Ann:

They will have to up again at some point.  And, you are right, when they do it will be a huge hurdle for some people to accept higher rates.

 

 

Nov 26, 2009 09:56 AM #8
Rainmaker
545,096
Toula Rosebrock
Diane Turton, Realtors, Forked River, NJ - Lacey Township, NJ
Broker/Sales Associate, Realtor, Lacey Township,

ToulaRosebrock,com

Hi Claudette:

The rate are so low right now.  What a great time to buy!

And you're right, it's an early Christmas present...

Nov 26, 2009 11:42 AM #9
Rainmaker
596,993
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website

I hope the Mortgage Bankers Association is engaging in industrial wishful thinking.

Nov 26, 2009 06:02 PM #10
Rainmaker
403,671
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Toula:

I hope more people will take advantage of these low rates. It's really is a great opportunity to buy.

Jim:

We can only hope that is the case; however, they will go up at some point.

 

Nov 26, 2009 10:47 PM #11
Rainer
111,232
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

Mortgage rates might never be any lower than they are today.  It's hard to believe that they have remained this low this long.  Not so many years ago we would have been excited about 7 or 8% rates. 

Financing though is considerably tougher than it has been in many years.  This probably won't change for many years to come.

Nov 29, 2009 12:37 PM #12
Rainmaker
403,671
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Charles:

I also remember being content with 7% not that long ago.  But, you are right, buyers now have to have good credit to qualify.

 

Nov 29, 2009 01:43 PM #13
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Claudette Millette

Buyer, Broker - Metrowest Mass
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