Interest Rates Continue to Fall; Near Record Lows Recorded!

At the end of March, the government stopped buying mortgage-backed securities which they had been doing for over a year to put downwards pressure on interest rates. Many people believed rates would start moving upwards after this. Though we did see an uptick of about 0.25% it quickly leveled off and began returning towards the record lows we saw this past December.

Right now a 30 year fixed mortgage is at about 4.78%, just slightly above the record low of 4.71% recorded in December 2009. A 15 year fixed mortgage is at 4.21% which is the lowest in almost 20 years. In the coming weeks we may even see new record lows on 15 and 30 year loans.

So what exactly is driving rates back down? Mostly it has been private investors, specifically many from overseas. Because of the recent economic and government struggles in Greece, Portugal and Spain the euro has been devalued. Many overseas investors are seeking the security of U.S. bonds, in particular mortgage-backed securities, as a safer bet which has been driving down rates on home loans.

 For now, with the turmoil in Europe, rates may continue to decrease. Once the Euro gets back on track and our economic recovery continues we will likely see rates begin to increase again. So if you’re thinking about buying then strike now while the iron is hot and rates are low. If you want more guidance on the buying process or to figure out if now is the right time to buy then contact us and one of our experienced Realtors can walk you through the process.