I've been working on the monthly Texas market updates, so checked in on mortgage interest rates.
As you may know, home mortgage rates were decreased by half a point. This is the first decrease since 2003, so now is an even better time to buy. According to Inman News, the most compelling reason for the recent upswing in applications was the large decline in interest rates.
The MBA (Mortgage Banker'ss Association) reported that:
- The average contract interest rate for 30-year fixed-rate mortgages dropped to 6.25 percent from 6.42 percent
- The rate on 15-year fixed-rate loans slid to 5.9 percent from 6.1 percent
- The rate on one-year adjustable-rate mortgages (ARMs) declined to 6.34 percent from 6.52 percent.
This is very good news and confirms what I'd recently explained to a beginning investor that the Federal Reserve learned from the mortgage crashes in the 80s. Banks are much more smart in their overall mix of loan products and mortgage rates are expected to be increased or decreased to spur or slow the real estate market as appropriate.
Read the full report on Inman News.
Read our previous story on how the mortgage fallout created a Buyer's Market in Texas.
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