Freddie Mac reported on Thursday that 30-year fixed interest rates for mortgages remain below 5 percent (4.91). This is good news for buyers, of course, potentially saving them thousands in lower monthly payments over the course of the loan.
This article in Realty Times has the comprehensive quote:
“Interest rate on 30-year fixed-rate mortgage loans fell for the third consecutive week to the lowest since the week ending May 21st, while 15-year fixed rates were the lowest since our records began in 1991,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan. Moreover, for the fourth consecutive quarter, more than 95 percent of prime borrowers who originally had an ARM selected a conventional fixed-rate mortgage in the third quarter of this year.”
Clearly lower interest rates plus a significant dip in prices in recent quarters deserve much of the credit for recent increases in real estate sales.
More prominent during last week’s news cycle, however, were stories touting the $8,000 first-time homebuyer’s tax credit (and now the $6,500 credit available to homeowners looking to buy and sell), like this one in the Wall Street Journal online edition.
Which incentive do you believe is driving more sales? Contact me for more details on these topics and their relevance to the Jackson Hole real estate market.