According to Freddie Mac rates on mortgages dropped below 5% again last week, just a few weeks before a government program designed to help keep rates low is scheduled to end.
The average rate on a 30 year fixed rate mortgage was 4.97% last week or down from 5.05% a week earlier. Rates had been as low as 4.71% in December of 2009 but have hovered close to 5% since then being held pretty much in check by a Federal Reserve program hoping to spur more home buying by lowering the cost of obtaining a loan.
The Fed set aside $1.25 trillion to buy mortgage backed securities. That campaign is scheduled to end or expire on March 31. Questions remain as to how effective the program has been. Most home buyers did not see any significant change in the cost of obtaining a new mortgage, although guidelines for lenders making mortgages have changed.
The other part of the equation of course, to encourage more lending by banks into the mortgage markets has not seemed to work at all. Data provided by the National Association of Realtors shows that pending sales, (homes in contract) of existing homes dropped 7.6% in January from December. That is the lowest reading since April 2009 and a disappointment. That index had declined for 2 of the past 3 months and was widely expected to improve.
Some market analysts think that mortgage rates may begin to rise once the Federal program ends later this month. This may be a good indication that potential home buyers and sellers should get into a contract and lock rates now.
If you or someone you know have been considering buying or selling a home in Southeast Florida please call me directly at 561-306-6736 or drop me an email at rebuygeorge@yahoo.com.
For more info on buying and selling visit www.ges-realty.com . It's easy to use and totally free. What could be better than free in this economy?
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