In short, low rates! Currently, we are extremely low rates across the board.
Here’s an example of what you can expect:
30yr conventional & FHA, primary home= 4% to 4.25%
30yr jumbo = 4.5% to 4.75%
5/1 ARM, conventional= 2.875% to 3.25%
5/1 jumbo ARM= 3.125% to 3.5%
15yr fixed, conventional= 3.375% to 3.75%
We are seeing a lot of refinances with these rates. However, we are also
seeing purchases tick up because of the rates and the abundance of lower
priced homes out there. Perfect for a home buyer!
Why are rates so low? The biggest factor is the poor economy. We are not
out of the woods in this country. Recent unemployment reports and other
economic indicators suggest a weak economy. Furthermore, we are getting
help from Europe. Their economies are worse than the United States’.
Several countries are passing austerity programs only to be met with
violence in the streets, and European banks post anemic numbers. Japan is
not doing well either. It was already weak before the earthquakes and
tsunamis, and those events compounded that country’s issues.
Combine a poor economy here with even worse economies elsewhere,
and investors will turn to safe-havens. The safest haven of all is the United
States and our debt instruments. So, as investors buy our bonds and bills,
the US Treasury doesn’t have to promise high rates of return. Thus, we are
seeing low rates on mortgages and other longer-term investments.
If there is a bright spot with the poor economy, it is the low rates. Now is
the time to take advantage of this rate environment. Call me or drop me an
email about refinancing your home or purchasing another home. We can
also help you if you want to invest in a rental property as rental occupancies
are the highest in years.
