Sacramento Real Estate Views

Mortgage Rates At ALL TIME LOW!

Rates At Lowest Level Of The Year, Again!

Rates bounce around so much and are so dependent on worldwide economic factors that it’s difficult to know where they will go in the micro picture.

In the macro picture, however, it’s a little easier to say that they should kind of go this way or that way.

Economists across the board are saying that in the short term, this year in fact,that interest rates will be going up due to the Federal Reserve ceasing their purchase of mortgage backed securities.

As a result, rates are expected to go up to 5.5% to maybe even 6% by the end of the year.

Will that happen?  Who knows?  What we do know is that The Grand Pooba, Grandpa Frank Nothaft of Freddie Mac has come out with his weekly assessment of the nationwide mortgage market.  (Clearly, the force is strong with this one!)

Grandpa Frank’s Pearls of Wisdom

Here are this weeks comments from Frank Nothaft, VP of something or other at Freddie Mac:

1)  Long term interest rates have declined for the 5th straight week.

2)  The National Association of Realtors is citing that median home prices are recovering in a more local sense this quarter than in the last quarter. (can it happen otherwise?)

3)  91 of 152 metro areas are experiencing positive growth. (is there any other kind of growth?)

4)  All is rosy….for now.

The average fixed rate mortgage in the west is 4.91% and about .09 for points and fees. Not bad!  Thanks again to the Grand Pooba for his pearls of wisdom, we appreciate it!

What To Watch For

On a more serious note, keep an eye on the following factors when assessing whether this is a good time to buy a home:

1)  The first time homebuyer tax credit on the federal level is gone.  California has put in place it’s own tax credit but that won’t last long.

2)  The Federal Reserve is getting out of purchasing mortgage backed securities.  Many believe that this will cause interest rates to rise to 5.5% or up to even 6% (perish the thought!) by the end of the year.

3) HUD, who essentially absorbed the “sub prime’” mortgage market and accounts for 30% of purchase mortgages, is being forced to cut back their involvement in the market due to losses.

All this could equate to prices continuing to drop or at best hold steady. If that happens, buying activity will fall off unless other factors occur to prop up the housing market, yet again, and we could see home prices continue to fall as demand weakens.

Geez I actually sound like I know what I’m talking about there…it’s all a ruse!

Anyway, that’s the mortgage post, hope you enjoyed it!

Thanks for visiting!

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Tags: home loan interest rates

This entry was posted on Friday, May 14th, 2010 at 6:00 am and is filed under Mortgage Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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