Mortgage Rates Falling!
After the news that the Federal Reserve would buy as much as $300 billion of long-term U.S. Treasure securities, the rate on a 30-year fixed mortgage fell to 4.75% and may go even as low as 4.5%. That would be the lowest mortgage rates since World War II! In 1945, the average annual rate for a mortgage was 4.7%,
Still, the low rates, on top of the $8000 homebuyer tax credit, may not be enough to entice buyers. If you’re worried about losing your job, buying a new home isn’t on your list of priorities. Plus, even if you’re game to jump into the market, tightened lending standards and new restrictions from Fannie Mae are making it difficult to get a mortgage. Citigroup reports, “We continue to hear from homebuilders about the inability of potential buyers to come up with even the minimum 3.5% downpayment necessary for an FHA-insured loan. Also, homebuilders have run sales in which they have agreed to sponsor low mortgage rates and the uptick in sales has typically been marginal.”
For those who qualify for financing, and are considering a home purchase, now is the time to buy. Favorable interests rates allow you to purchase more home for your money than has been possible for a long time.
Readers, anyone looking to buy a home? Tell us your story.