Have you been waiting for 30-year-fixed mortgage rates to drop to a record low? If so, the time has come. Records dating back to 1971 indicate that current rate of 4.15% is at its lowest point on record, with many speculating the last time rates were this low was when President Eisenhower ran the nation.
How does a rate of 4.15% compare to the last 10 years? In 2000, 30-year-fixed mortgage rates were over 8%. Even in 2006, mortgage rates were approximately 6.5%. Although rates dipped down to 4.17% in November of last year, just last week mortgage rates were 4.32%–making a drop to 4.15% rather significant.
Why, exactly, is the mortgage rate this low? In short-an unstable global economy.
Consumer confidence is less than desired as the Dow continues to fluctuate due to U.S. economic concerns and wavering markets in both Europe and Asia. The high unemployment rate of 9.1% is definitely not helping the confidence level either.
However, there is some great news and a light at the end of the tunnel. Commercial real estate is definitely expanding as foreign investors look into a high supply of investment opportunities in places like New York, Washington, D.C., and southern Florida. As a result, jobs are being created and money is being poured into the economy in these gateway cities.
How, exactly, do the current rates affect homeowners?
With many consumers currently paying mortgages with interest rates that are 1% higher than the current mortgage rate, refinancing is likely to occur in the near future as homeowners desire to take advantage of these incredibly low rates.
But what do these low rates mean for investors and homebuyers? Exceptional opportunities!
The real estate market is going to recover and now is the perfect time to buy that home or investment property you have had your eye on over the last few months. With mortgage rates this low, you can save a fortune in interest rates alone.
In addition, the rental market is flourishing and many investors are purchasing everything from single to multi-family homes and renting them out for well over their monthly mortgage payments. As a result, you are able to make an immediate return on your investment due to rental demand and low home prices.
In the end, the falling interest is unlikely to last very long and investors and homebuyers would be smart to lock in on this rate while it lasts! Investor or homebuyer? The time is now!