Tuesday, March 31, 2009

Fed Move Brings Rates to New Lows

From news, a few days ago:

The 30-year fixed-rate mortgage averaged 4.85 percent with an average of 0.7 point for the week ending March 26, down from 4.98 percent a week ago and 5.85 percent a year ago. The rate has never been lower since Freddie Mac began its survey in 1971.

Compared to a 30-year fixed-rate mortgage taken out at last year's high of 6.63 percent on July 24, the current rate represents savings of about $225 a month on a $200,000 loan, Freddie Mac chief economist Frank Nothaft said.

The Fed’s move also spurred refinance activity. The Mortgage Bankers’ Association said said refi applications jumped 41.5% in the week following the announcement that the Fed would buy more mortgage backed securities.

Buried in that story was notation that purchase mortgages were up 4.2% last week.  Locally that story sounds pretty good to me. The inventory of homes for sale is dropping, mortgage applications are up. The local media is starting to talk about a “great time to buy!”.

All that sounds like the beginning of the end of a terrible real estate market to me.

(maybe there’s a reason my Dad always called me Pollyanna)