Although not back down to their all-time lows, interest rates have started to come back down. So…if you were worried about the effect current mortgage interest rates may have had on your home for sale, you may be feeling a bit better. As of July 18th, 2013, the Freddie Mac Primary Mortgage Market Survey(R) (PMMS®) reports that average fixed mortgage rates are showing reductions.
“Fixed mortgage rates fell as Federal Reserve (Fed) Chairman Bernanke helped ease market concerns about the Fed reducing its bond purchases. During a question-and-answer session following a speech on July 10th, Chairman Bernanke indicated that a highly accommodative monetary policy is what’s needed in the U.S. economy,” said Frank Nothaft, Freddie Mac’s chief economist and vice president.
Nothaft further reported that, “Indications of a slowing in the economic recovery also placed downward pressure on mortgage rates. Consumer sentiment fell to a three month low in July while retail sales in June grew by only 0.4 percent, which was half of the market consensus forecast. In addition, housing starts fell in June to the slowest pace since August 2012.”
While it’s impossible to determine how low and how long mortgage rates will dip, this decrease allows for slightly more buying power for those seeking to purchase a home (when compared to recent weeks) resulting in more home inventory choice as determined by pricing. So, if you are in the market to sell your home, you may notice a renewed flurry of interest.
Interest rate trends are national, and always interesting, but they do affect local real estate markets. Our real estate market here in Long Beach is now stronger than most of the country, giving local buyers and sellers an even greater benefit in Southern California. Recently, the 30-year fixed-rate mortgage dropped to an average 4.37% (0.7 point) and the 15-year average fixed rate mortgage decreased to 3.41 percent (0.7 point). Even the 5-year Treasury-indexed hybrid adjustable-rate mortgage was lower, at 3.17 percent (0.6 point). However, the 1-year Treasury-indexed ARM remained the same as in prior week, at 2.66 percent (0.4 point).
Nobody knows for sure what interest rates will do; however, most experts agree that the overall direction will be upward. So if you are thinking about buying or selling, please contact me as you may want to treat this reduction as a timing opportunity.
Click here to compare mortgage rates throughout 2013.
