Sunday’s announcement of the takeover of Fannie Mae and Freddie Mac has led to a dramatic decrease in interest rates. Conforming 30 year fixed rates have dropped almost a half point, and even jumbo 30 year fixed rate mortgages have dropped about three tenths of a point. Following are interest rate quotes as published by bankrate.com on 9/9/08:
|Type of Mortgatge||TODAY||+/-||LAST WEEK|
|30 yr fixed mtg||5.88%||6.26%|
|15 yr fixed mtg||5.49%||5.77%|
|30 yr fixed jumbo mtg||7.08%||7.39%|
|5/1 jumbo ARM||6.32%||6.45%|
This drop in interest rates should have a dramatic impact on hastening the stabilization of the housing market. Now is an excellent time to be looking for property to buy as we enter the fall season. During this time of the year, inventories tend to decrease, and buyers become more motivated to sell. If you are waiting for the last bit of decrease in housing prices, you should consider the offsetting risk of interest rates increasing from these new low levels if inflation pressures increase thus leading to higher mortgage rates. Any advantage of waiting for prices to decrease could easily be offset by an increase in interest rates.