Monday, September 18, 2006

Mortgage rates going DOWN

For the seventh time in the past eight weeks, mortgage rates have been on the decline. Rates are once again under 6.5% for a 30 year fixed and 6.1% for a 5 year adjustable, respectively. I actually just had a client who just closed who locked in his rate because he didn't want to risk an increase on his rate, especially with a close date 90 days out. Who could blame him? At the time the Fed was increasing rates and it just wasn't worth the risk. Well, won't you know it, rates started to decline a week before he had to close, and yes, they were below his lock. While my client wasn't able to change his rate, he still had a great rate and an amazing new home. The moral of this story in not to not lock in a rate, but that mortgage rates are not going to run straight through the roof, like so many people feared. According to Frank Nothaft, Freddie Mac VP and Chief Economist, "with short term interest rates increasingly seemingly on hold, for a while at least, interest rates overall should not experience any big shifts in either direction." Not only is this good news for buyers, but for sellers as well. With rates stabilizing at such low rates, that should keep more buyers out there and sellers who are ultimately ready to make that next move, will be able to sell and then buy their new home. And there you have the circle of real estate life.