Mortgage rates have been low for some time but they apparently had yet to hit rock bottom. They recently reached a new record low as rates for a fixed mortgage dipped down to 3.84 percent. Just last year, average rates for a fixed mortgage were at least one percent higher (as if that wasn’t low enough). The drop in mortgage rates is related to uncertain feelings about the economy and investors respond by putting their money into the safest bet in town, Treasuries. More investment in Treasuries has resulted in higher demand which in turn has resulted in lower yields. Since there is a tendency for mortgage rates to go down as yields from ten-year Treasuries drop, we have ended up with the lowest mortgage rates we may ever see.
With that in mind, this is a fantastic time to buy a house. In time, property values will increase so buyers can hardly lose. What they will do is save thousands of dollars that they would have paid in interest if they buy a year or two from now. Of course mortgage rates could be just as low at that time but since they are at a record low right now, it’s hard to believe that they could get much lower. This just might be the key point for realtors to get across to contacts and clients to make more deals during the summer of 2012.
To learn more about real estate technology that can simplify and speed up the transaction process in this excellent buyers’ market, contact us.