Mortgage rates fell last week, after the Federal Reserve declared that inflation would level off sometime later this year. This news was released by the troubled Freddie Mac mortgage company. According to Freddie Mac, “30-yeard fixed-rate mortgages averaged 6.35% with an average 0.6 point in the week ending Thursday, down from 6.45% last week, and that last year at this time, the 30-year loan averaged 6.63%.”
Now, you may see this as good news, but some may see it as dangerous. While I firmly believe that the interest rates, as they stood during the height of the housing market bubble, were unrealistically low, I don’t want to see them flip to the opposite end of the spectrum. The interest rates had to readjust in order for the incredibly high cost of homes to come back down to earth. So seeing the rates start to go back down, however little it may be, is reassuring. As far as the Federal Reserve stating that inflation would level off, I don’t see that happening for a while, at least not until our new President takes office. Even then it will take whoever wins quit a while to clean up the mess the housing market is in right now.
The good news is that the inflationary pressures, which the Federal Reserve expects to see ease, could help borrowers who are in the progress of or looking to refinance by giving them some encouragement. That being said, experts in the mortgage industry believe we will keep seeing the mortgage rate fluctuate until there is greater certainty about the health of the economy and inflation.
Given the recent economic data, experts suggest that anybody looking to sell do it now, because it could be a while before interest rates stay at a stable level.
And for any of you out there looking to get into the housing market by purchasing a home, an improvement in interest rates makes it a good time to go sign up for a deal. That being said, mortgage rates haven’t gotten high enough, yet, that it should make or break your decision to buy a home. Even though the mortgage rates we are seeing now are much higher than a year or two ago, they are still very low, so experts say that if you can’t afford a house with a fixed mortgage rate of 6.25%, you probably can’t afford the house.
If you are looking to buy a house, sell a house, refinance your house or you simply want to know the current value of your house, please visit us at Mahler & Associates for all your appraisal needs.