Mortgage Rates at Record Low

[Just reported Monday 10/22/12 by the AP wire network]

The interest rate on the very popular 30 year fixed mortgage has dropped again to 3.37%. 

The interest rate on the other popular 15 year fixed mortgage has also dropped again to 2.66%.

The rate on the 30 year fixed interest rate has now remained below 4% for this entire year. This stability in the rate’s is partially due to the Federal Reserve buying mortgage bonds. Their action was a way to continue to encourage more borrowing as well as spending in the economy. This move will more than likely continue till the unemployment numbers show a substantial improvement.

When home prices rise like we have seen in this area since November of 2011, people tend to feel better about spending more freely, and that spending drives nearly 70 % of all economic activity, in this country.  Another good sign in our market is higher home sales. Sales of single family property are significantly above 2011 numbers, and are increasing by small amounts, and on a consistent monthly basis.  Trend lines show both values and sales are on the march upward. After 6 years of being one of the worst markets in the U.S. this is very good news.

Builders are excited as well. With good quality re-sale homes being bought faster than in the past, leaving homes that sit and linger on the market due to expensive repair and rehab costs, people are looking to build once again. Across the nation, October is on pace to be the best month in 4 years for new homes coming out of the ground.

What About Me

For me, as a Realtor on the street every day, I see more and more pick up trucks and work vehicles with builders names on the doors. With new construction brings jobs for workers, and spending for their goods and services. SW florida will once again enjoy being a destination state once again. Still the housing market clearly has a long road to its recovery ahead.

For many however, it’s still impossible to take advantage of these low mortgage rates, either because they can’t qualify under the new [stricter] lending requirements, or lack the money to meet the larger down payment requirements. I never want the flood gates to open ever again where it was almost free money, to anyone wanting it to purchase a home…….but lenders are going to far these days in qualifying requirements. It use to be that any credit score above 700 was excellant…..today its only mediocre.  It’s almost like having to prove that you don’t need the money in order to get a loan! Perhaps private money will find its way into the market place, but if so, certainly at interest rates far above what a bank will charge..

By |2012-11-09T15:54:55+00:00October 24th, 2012|Cape Coral, News, Other, Real Estate|0 Comments

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