A great time for flipping houses: Mortgage rates dip even lower
This week the rates on 30-year mortgages dropped to their lowest point in 2 months, averaging 6.59%, down from 6.68% last week. Of course, this is good news for people who are thinking about buying a home, especially those who are having a difficult time getting credit. All of this is taking place because recent stock market turbulence has prompted investors to put more money into bonds, which in turn has driven down their rates. In turn, this has pushed down mortgage rates.
Along with 3 year mortgage rates going lower, rates on 15-year fixed-rate mortgages have also moved lower this week. They have dropped from 6.32% to 6.25%. Rates on one-year adjustable-rate mortgages also fell from 5.69% to 5.65%. On the other hand, rates on five-year adjustable-rate mortgages actually rose from 6.29% to 6.33%. None of this figures in add-on fees, which are more commonly known as points which averaged between 0.4 and 0.5 points depending upon the type of mortgage you get.
Unfortunately this has not helped real estate sales though. In fact, it is expected that the housing market will remain in a slump for the rest of this year. Worries about this and thoughts that the housing slump will worsen and that credit problems in the home mortgage market will spread, may also be hurting the broader financial system and the overall economy. This has also fed turmoil on Wall Street where stocks have been going through wild swings in the past few weeks. Of course, home foreclosures have also climbed to record highs, which has caused lenders to tighten credit standards, which has made it more difficult for some people to find financing for purchasing a home.
The National Association of Realtors has also lowered its forecast for sales of existing homes, which is actually a major part of the housing market. They are predicting that sales will total 6.04 million this year, which is the lowest level since 2002. Previously they had forecasted that sales would reach 6.11 million for this year.