Mortgage rates drop again – good for buyers AND sellers
This week mortgage rates continued their slide down the fire pole, setting all-time record lows for 15- and 30-year fixed-rate loans. A report on Money.CNN.com on Thursday, July 26 says a survey by Freddie Mac places the 30-year loan at 3.49% and the 15-year loan at 2.80%.
Freddie Mac’s chief economist said worries within the market about the possible lack of strength of the current economic recovery is responsible for the drops in rates, which have fallen or matched lows for 13 of the last 14 weeks. A senior executive for a mortgage information and analysis firm said the troubled European economy is also a factor in our low loan rates.
Low rates are good for buyers and sellers both. Buyers love to buy when they can save a lot of money. Sellers love it when buyers can buy and save money, because there are more buyers coming into the market. Low interest rates are also great for those wanting to refinance.
The Money.CNN.com story showed how switching from a 5% rate to one of 3.49% on a $200,000 loan will save the homeowner $178 per month and $2,136 over a year.
When you consider the mortgage rates in the 1980s that were 15% or more, it’s easy to see why the real estate market is so appealing right now. It’s very important for those who could buy a home today and those who could buy one, with a little juggling, to make this a serious consideration. Rates are NOT going to stay this low forever.
That’s good news for buyers. The good news for sellers – at least in Fort Smith, but not in all that many other areas within the United States – is that home values have remained fairly constant during the last four or five slip-and-slide years. Many homeowners around the country are refusing to put their homes on the market these days because if they sold them now, they wouldn’t get enough money to pay off the remainder of their loans.
Fort Smith homeowners who have been thinking of selling should do it now. There are a lot of motivated buyers, and the sellers will come close to receiving what they paid for their homes. In an upcoming post here, we’ll go back and revisit the recent history of Fort Smith home prices and show how level they’ve been over the last few years.
It’s a buyer’s AND seller’s market. Don’t let the lowest interest rates in history pass you by.
Nick & Ellie