First the good news, then the bad news.
We’re all happy to learn from Freddie Mac that this week’s rates for 30-year FRMs (fixed rate mortgages) are at their lowest since March 2004. They’re now averaging 5.47 percent, down from last week’s 5.53 percent. This time last year, they were at 6.11 percent.
But there are two pieces of bad news.
First, Frank Nothaft, Freddie Mac’s vice president and chief economist, says: “The housing market still hangs in the balance… On a year-over-year basis, after rising in both August and September, pending existing home sales fell 1.0 percent in October, based on figures from the National Association of Realtors®”
In other words, the cheap rates aren’t working. And the economy’s not going to turn around until we see some bounce in the housing market.
The other bit of bad news came from today’s Washington Post: “No matter what the rates are, borrowers should keep in mind that they probably will not qualify for the lowest offers if they lack stellar credit.”
Which means that in today’s climate all too many Americans will find themselves excluded from the newly-cheap deals. And they’re the ones who need low rates most.
Tags: freddie mac, getting a mortgage, housing market, mortgage rates, US ecomony, US economy
December 12th, 2008 at 3:10 pm
If you have the resources to buy a home now–go for it! We are seeing great interest rates for new home buyers and with the decline in property values we are seeing home prices at bargain deals. Housing, like most else, is cyclical–prices for homes and interest rates will rise. The current market is a great time to put yourself in good shape for some long term investments if you have the resources to do so.
However, learn from the last couple of years. Don’t get in over your head, don’t take out a risky loan, and make sure you are smart before buying a home or making a mortgage commitment.
If you want to know where you stand, talk to a reputable loan officer and get pre-qualified for a home loan. There is no cost to do so and you will get the information you need to make an informed decision and/or find out what you need to work on in order to take advantage of current market conditions.