Mortgage buyer Freddie Mac stated on Friday 9/7/12 the rate for 30 year fixed loans is now 3.55%!
This still is one of the lowest rates since the 1950’s. While rates did dip for a brief period to 3.49%, it was only for a short lasting duration. So although the 3.55% is not a record setter, it has added great gains to the housing recovery.
Cheap mortgages have lifted home sales for 2011, and now for 8 full month’s of 2012. Mortgage money tends to track the 10 year Treasury Note. Uncertainty about the European markets and its debt crisis……and other factors……tends to push investors toward Treasury securities as a safer investment. As demand for Treasury Notes increases, the yield naturally falls, and the cycle reverses course again.
Prices have also climbed consistently during this same time. This trend is fueled by the fact that the available supply of homes has shrunk. Currently in our market there is only about a 4-5 month supply of available re-sale homes. In the height of the foreclosure frenzy, we actually saw a 13-14 month supply of available homes for purchase, in our area. So we have come from a rock solid “buyers market” in the 13-14 month inventory period, to a pendulum that has swung back toward a “sellers market”.
Since inventories of re-sale homes is low…….it makes for a perfect time for builders to re-enter the market with both “Spec” as well as “Custom” home construction. Lee County Community Development Authority reported that 141 new home construction permits have been issued in the last 3 month’s. In addition, 17 permits were issued for multi-family construction. This is good news for our area.
So it would seem that any change in the interest rate has a dramatic impact on the housing and mortgage market here in our area. We just need to get the banks to start lending in greater volume, and amounts, so that this good trend will lead us to an economic recovery in Lee County and the rest of the country!!.