At least one fear was not realized amid last week’s stock market meltdown according to CNNMoney.com: the concern that mortgage rates would immediately shoot higher in response to Standard & Poor's downgrade of Fannie Mae and Freddie Mac, the government-sponsored entities that are the 800-pound gorillas of the mortgage market. In fact, the initial response to Fannie and Freddie getting cut to AA+ from AAA was precisely the opposite. Mortgage rates were poised to continue declining.
Mortgage rates are set off of the interest rates on U.S. Treasury notes and bonds. Even though Standard & Poor's pulled its AAA rating of the United States, investors still rushed into U.S. Treasury securities as a safe haven, believing more in the "full faith and credit of the United States" than in the opinion of Standard & Poor's credit analysts. As investors snapped up Treasury notes and bonds they pushed down interest rates on those securities, which move inversely to prices.
Analysts warn the drop in interest rates may not last. If investment flows were to move back into stocks and out of bonds, interest rates on Treasury securities, and consequently mortgages, would rise. "Over the long-term, if the U.S. has to pay more in interest rates, consumer rates will likely go up," said Greg McBride, senior financial analyst for Bankrate.com.
For now, lower mortgage rates may offer only limited benefits to American consumers. Banks' lending standards have been tough recently, and consumers need the wherewithal to qualify for loans. That appears increasingly difficult as the economy continues to sputter.
Now take a look at how the Greenville NC real estate market performed in July.
Greenville NC real estate sales statistics for July saw the average sales price decrease by 6% to $136,532 when compared to July 2010. The sold listings have decreased by 30%. New listings have decreased by 13% when compared to 2010 and pending sales have decreased by 4%. Market times increased by 49 days or 28% from July 2010.
|July 2011||126||80||69||$ 136,532||175|
|July 2010||145||83||98||$ 145,621||126|
Information is provided by the Greenville Multiple Listing Service and is deemed accurate but not guaranteed.
Whether you are considering buying a home, selling a home or both, Liz Freeman knows the Greenville, North Carolina area inside and out. Most of her team members were born and raised in Pitt County, NC which has provided them with strong ties to the area, allowing them to become a successful Greenville NC real estate team.