The Associated Press is reporting that interest rates on 30 year mortgages have fallen to their lowest level in the history of Freddie Mac tracking mortgage rates, which was back in 1971. The average rate on a 30-year fixed-rate mortgage was 4.78% this week, down from 4.85% the prior week and down more than a full percentage point from a year ago.Using this mortgage calculator, we can see what this means for prospective home buyers, and those with higher mortgage rates who are considering refinancing. (If you do qualify for refinancing, by all means this is a great opportunity to do so.)
Let's use a $200,000 mortgage to see how today's low rates affect a monthly payment:
In this scenario, the cost of a monthly payment over the past year has dropped by more than $120. Over a year's time, that's $1,400+ in savings and, during the course of the 30 year loan, nearly $45,000.It is anyone's guess how long today's low rates will last, and if it will help stimulate home buying activity. But there's a lot of favorable things happening for prospective buyers. We have record low mortgage rates, home prices that are at 2003 pricing levels, an $8,000 tax credit for first-time home buyers and a large inventory of available homes.
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2 comments:
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Commercial Real Estate Investors Blueprint
We hope that there will be more good news about this real estate industry. Thank you for sharing this.
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