A Note on Interest Rates
I came across this article on interest rates and wanted to share it.
According to CNN, the interest rate on a 30-year fixed-rate loan fell to 3.94% this week, the lowest rate since Freddie Mac began tracking it. Meanwhile, the average for a 15-year fixed-rate mortgage also hit a record, falling to 3.26%.
This results in substantial savings for homeowners.
Compared with just three months ago, when the 30-year was at 4.60%, borrowers today can save about $40 a month per $100,000 borrowed.
That comes to a savings of nearly $14,000 for every $100,000 borrowed over the life of the 30-year loan.
Then there's this article from KW.com...
Mortgage rates hit a new record low in August of 4.15%, primarily due to uncertainty in the global and domestic economies.
While these incredible rates represent a significant savings for home buyers, experts note that for the benefits to be fully realized, lending conditions must loosen to enable more buyers to take advantage of them.
As overall economic activity gets back on track, rates will likely rise to keep inflation in check. In other words, the window of opportunity for buyers to lock in these historically low interest rates will not last forever.
What's the Bottom Line?
Also, a big wave of "shadow inventory" will hit the market soon. This is a backlog of foreclosures in process, making it even more difficult for sellers to compete.
Now is the best time in history to BUY! Inventory is high, rates are low, prices are low. It's still a historically GREAT time to buy a home!
If you know anyone looking to buy or sell, send them my way!
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Home prices dipped by less than 1% in July with median home price at $174,000.
This is 4.5% below the year-ago level which followed a strong spring season of sales driven by the tax credit. Median home prices remain close to 2002–2003 levels.
Distressed sales continue to count for almost 1 in 3 homes sold.
The combination of low prices and record-breaking low interest rates means that home affordability is extremely favorable.
Home sales in July were up by 21% from the same month last year when the expiration of the tax credit resulted in a significant drop in sales.
However, they were down 3.5% compared to June.
This could be due in part to NAR’s report that 16% of members experienced a contract failure from issues in underwriting and appraisals during July.
NAR President Ron Phipps states, “For both mortgage credit and home appraisals, there’s been a parallel pendulum swing from very loose standards, which led to the housing boom, to unnecessarily restrictive practices as an overreaction to the housing correction.”