By Good news this week from mortgage giant Freddie Mac could be a positive sign for the real estate industry, and for the US Economy as a whole.
Let’s examine what they said.
In their Primary Mortgage Market Survey, Freddie Mac reports that rates for a 30-year fixed rate mortgage remain historically low (well over a full percentage point better than at this time last year). The news was much the same for both 15-year fixed-rate mortgages, as well as 1 and 5-year ARMs.
What does this mean, exactly?
Well, these low mortgage rates help to maintain affordability in the housing market, which is great news for buyers, sellers and Realtors alike. They can also, very likely, be credited to some degree with four consecutive months of rising home sales for both existing and new homes.
And with many showering accolades on The Federal Reserve Bank and their handling of mortgage rates, it doesn’t seem likely that they’ll be increasing much anytime soon.
Even still, it’s important for consumers to be vigilant with regard to choosing mortgage products and to weigh their options very, very carefully. There is far more to look at than just the annual percentage rate. Borrowers should ask themselves — or their lender — if it’s better for them to look at a lower rate, or to pay points. What will the implications be if (and when) they choose to refinance? When it comes to paying points, would it make more impact in their lives for them to take their liquid capital and invest in something else?
Bottom line: It’s critical borrowers examine their options closely and use a lender with whom they have trust and with whom they’re comfortable.
Other things for buyers to be aware of are that, nationally, home prices rose for the second month in a row. This is terrific news for the economy, but could signal that home prices might not decline much further. Also, any first-time homebuyers looking to take advantage of the Homebuyer Tax Credit need to remember that it only applies to homes purchased before December 1, 2009.
Point blank: if you’re in the market to buy a home, it would seem that now really is the time to do it.
The real estate markets have a long way to go before their foundations can, once again, be considered firm and strong, and the base for our nation’s economy. But we’re getting closer each and every day.
