The average US rate on a fixed mortgages decreased this past week to the lowest levels since long-term mortgages began in the 1950s. This decrease in the average fixed interest rate will give prospective buyers more incentive to purchase property in the housing market.
According to mortgage buyer Freddie Mac, “the average rate on the 30-year loan fell to 3.56 percent… That’s down from 3.62 percent last week” (Freddie Mac). Comparatively, the rate on a 15-year mortgage dropped from 2.89 to 2.86 percent this past week.
Rates have been trending downward over the past 11 or 12 weeks. As a result, the low cost mortgages have played an integral role in getting the housing market back on track. Though Southwest Florida has seen a steady rebound in the number of sales, pending sales, and an increase in home prices due to a reduce inventory, “low mortgage rates could also provide some help to the economy if more people refinance” (Florida Realtors). When people refinance at lower rates, the amount of interest being paid decreases. The result is that those who refinance at a lower rate will have more money to spend to help stimulate the economy. Homeowners might spend money on remodeling their home, upgrading appliances, or purchasing new furniture.
Though rates are dropping, there are buyers who are having trouble obtaining financing for the purchase of a home. Lenders have loosened their grip just slightly, yet it is still difficult for some buyers to get into the home they want, simply because they are not qualifying for the credit requirements imposed by the lenders.
Nonetheless, the housing market is showing signs of rebound. Lower interest rates will ultimately lead to more “would-be” buyers braving the climate of the housing market. With more affordable terms, individuals should be more willing to not only seek out, but also purchase homes that are available.
If you have interest in property on Florida’s Gulf Coast, please click here, Southwest Florida Real Estate For Sale. For more information on a specific property, please contact Jim Mulligan, Suncoasteam Realty at 941-235-7474 orjim@suncoasteam.com.