For the first time in five weeks, mortgage rates have gone down rather than increase. The drop in mortgage rates is a surprise to many who thought there would be no stopping the increase once the federal government removed its backing of securities this month.
But we are not out of the woods yet. I’m not trying to be a “doom and gloom” messenger because I want the housing market to be better than it is now as I search for a home for my family. But one thing that may be keeping the mortgage rates from increasing by leaps and bounds is the first-time homebuyer’s tax credit, which is scheduled to end at the end of April. Once that goes away, we will see what happens to the mortgage rates. I join with everyone else in hoping they stay low.
The mortgage rates may have also dropped since last week because we are entering the spring months, which tend to be the best time period for selling homes. During the week ending on April 15, the average rate for a 30-year fixed mortgage was at 5.07 percent. That was a .14 percent decrease from the previous week, which was the highest it has been in eight months. However, that number is up from the 4.82 interest rate that occurred about a year ago and it is definitely an increase over the historic low of 4.71 percent just a few months ago in December of 2009.
According to Frank Nothaft, the vice president and chief economist for Freddie Mac, the current mortgage rates are back to the same place they were just two weeks ago after increasing for four straight weeks. The current rates are still at record lows which is an encouragement to today’s potential home buyer.
According to Freddie Mac, the rate on 15-year fixed rate mortgages is also down. The latest figures show that a 15-year fixed mortgage can be obtained for an average interest rate of about 4.40 percent, which is a drop from the 4.52 percent the week before. Mortgage rates for a one-year adjustable mortgage have also fallen from 4.14 percent to 4.13 percent and a 5/1 ARM with a five-year fixed rate now stands at 4.08 percent rather than the 4.25 percent from the previous week’s standings.
All of this is good news for home buyers who thought the rates were going to increase without end. The housing market and mortgage rates fluctuate so you never know what is going to happen and you can never predict the timing of lower rates. The best thing to do is to be a conscientious buyer and make the most informed decision that you can when purchasing a home.