Mortgage rates stay low, buyers not biting
By Inman News
Mortgage rates are hovering not far above record lows set during the first week in October, but demand for purchase loans hit a low last week not seen since 1996, surveys of lenders show.
Freddie Mac's latest Primary Mortgage Market Survey showed rates for 30-year fixed-rate mortgage (FRM) averaging 4.11 percent with an average 0.8 point for the week ending Oct. 20.
That's virtually unchanged from 4.12 last week, and not far above the all-time low in records dating to 1971 of 3.94 percent set during the week ending Oct. 6. Rates on the popular 30-year fixed-rate mortgage were at 4.21 percent this time a year ago, before climbing to a 2011 high of 5.05 percent in February.
For 15-year fixed-rate mortgages, rates averaged 3.38 percent with an average 0.8 point, essentially unchanged from 3.37 percent last week. The 15-year mortgage hit an all-time low in records dating to 1991 of 3.26 percent during the week ending Oct. 6.
At this time a year ago, 15-year loans were averaging 3.64 percent, before climbing to a 2011 high of 4.29 percent in February.
Applications to refinance were down 16.6 percent from the previous week, but refi requests still accounted for 77.6 percent of all mortgage loan applications.
In a forecast issued Monday, economists at Fannie Mae said they expect rates on 30-year fixed-rate mortgage loans to average 4 percent next year and 4.2 percent in 2013. Fannie Mae's forecast calls for sales of new and existing homes to grow by less than 1 percent next year, to 5.28 million, before picking up by 6.5 percent in 2013.
"In this type of environment, the housing market remains very sluggish and consumers' willingness to dig into their savings to purchase big-ticket items is very low," said Fannie Mae chief economist Doug Duncan in a statement. Duncan said leading indicators "point to housing sales bouncing near the bottom at least through the end of 2012."
The large inventory of distressed homes working their way through the market is putting downward pressure on prices, Duncan said, and with fall and winter being a weak seasonal sales period home prices are likely to show declines after firming for several months.
In My Opinion
I have been told since I started in real estate over ten years ago that the slowest months are November and December. I will say that I have seen some of my busiest times during these winter months. It is true that the numbers as a whole reflect a slowdown, picking up again after the first of the year.
Yet I have experienced the savvy buyer taking advantage of the market during this time of year, as well as a wise seller who understands that competition is down and they can showcase their home beautifully during this time which results in attracting serious buyers.
Don't let the market determine when it is a good time for your move, take advantage of low interest rates and good inventory and motivated buyers today. Call me, so I can arrange a market report for you which will provide details on what your next step should be.