Although lower is not always better, there are some scenarios where “record lows” are delightful:
- Right now, in the middle of our 110+ degree Texas summer heat
- At the national limbo competition (if such a thing exists)
- And of course, when talking about mortgage interest rates
I know the news has made everybody aware that interest rates are low, however, this week, mortgage rates reached their lowest point in 2011. Overall, the 15-year fixed rate mortgage and 5-year adjustable rate mortgage have both reached historical record lows according to Freddie Mac.
Low interest rates help to improve home buyer purchasing power by lowering monthly payments. Since your monthly payment consists of mortgage principle, interest, taxes, and insurance – these lower interest rates mean buyers have the option to get a larger house without increasing their monthly payments.
30-year fixed-rate mortgage (FRM) averaged 4.39 percent with an average 0.8 point for the week ending August 4, 2011, down from last week when it averaged 4.55 percent. Last year at this time, the 30-year FRM averaged 4.49 percent.
15-year FRM this week averaged 3.54 percent with an average 0.7 point, down from last week when it also averaged 3.66 percent. A year ago at this time, the 15-year FRM averaged 3.95 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent this week, with an average 0.6 point, down from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 3.63 percent.
1-year Treasury-indexed ARM averaged 3.02 percent this week with an average 0.5 point, up from last week when it averaged 2.95 percent. At this time last year, the 1-year ARM averaged 3.55 percent.
Although the future of interest rates is impossible to determine for sure, these historically low rates will help many home buyers in their search for the American dream of home ownership.
If you have any questions about what this means to real estate in Bryan/College Station, please don’t hesitate to pick up the phone or send an email – we’d be happy to go into more details.