Freddie Mac's Primary Mortgage Market Survey (PMMS) indicates average 30 year fixed rate mortgages dropped to 4.58 percent with 0.7 points. This is a decline from last week's 4.69 percent and well below this time last year when average 30 year fixed rate mortgages were 5.32 percent. The 15 year fixed rate mortgage average was 4.04 percent with 0.7 points, another decline change from last week's 4.13 percent. Last year's 15 year fixed rate mortgage average was 4.77 percent.
[AD]“Interest rates on fixed-rate mortgages and the 5-year hybrid ARM fell once again to all-time record lows this week in a period where the economy struggles to gain momentum and inflation remains very low,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Growth estimates for first quarter GDP were revised down by a half percentage point over the past two months to 2.7 percent, according to the Bureau of Economic Analysis. Annual inflation, as measured by the 12-month change in the core CPI, held at 0.9 percent in April and May, which is the slowest pace in over 44 years, as reported by the Bureau of Labor Statistics.
“Meanwhile, house prices are improving due in part to the homebuyer tax credit. The S&P/Case-Shiller 20-city home price index grew 0.4 percent between March and April and was up 3.9 percent from April 2009, representing the largest annual gain since October 2006. Moreover, 17 of the metropolitan areas experienced monthly gains in April, compared to 10 in March and six in February.”
Now could not be a better time to buy a home, especially if you are a first time home buyer. Not only are mortgage rates at record lows, but prices for homes have become more affordable, compared to the housing bubble. With good credit and savvy negotiation skills, you can get into a new home at the best market conditions for a first time home buyer, even without the tax credit incentive.
Credit Unions still have money to lend. Be sure to check with your local credit union for a mortgage loan. You will get personal service and very competitive rates. And since your credit union is local, you can talk to someone who probably lives in the same town as you. Your credit union is not going anywhere, so you can get assistance even after closing on your home.