With Mort?gage Rates at Record Lows, Now is the Time for Buy?ers to Act
August 22, 2011According to Freddie Mac, mortgage rates have fallen to their lowest point in a half-century, providing a good reason for American consumers to buy new property or refinance their current loan. The federally-sponsored mortgage company?s most recent Primary Mortgage Market Survey estimated 30-year fixed mortgage rates at 4.15 percent, the lowest figure since loans insured by the Federal Housing Administration averaged 4.08 between 1950 and 1951.
Although the historically low rates provide a perfect chance for buyers to secure affordable loans, many aren?t able to act due to tight lending standards. Additionally, some eligible buyers are stubbornly holding out in case home prices descend even further than they already have.
While this strategy could pay off; according to some experts, it may also end up costing prospective buyers in the long run.
Freddie Mac?s chief economist, Frank Nothaft, says he does not expect rates to stay low for much longer and warns that his company projects rates to get closer to the 5 percent mark toward the end of 2011.
On the other hand, Steven Leslie, top analyst for the Economist Intelligence Unit, a part of the Economist Group, says a dim outlook for the global economy leads him to believe that mortgage rates will remain low for the foreseeable future.
The differing views highlight just how challenging it is for experts to gauge which direction rates will go. Though analysts can provide best-guess scenarios, the only thing they can say for sure is that now is a great time to buy.
