With the back-to-schoolers back on metro Atlanta roads, you may have noticed your morning commute setting new records over the past few weeks. But there have also been some other new records being set over the past few weeks – exceptionally low mortgage rates. There has literally never been a better time to look for real estate in Atlanta.
Last week, Freddie Mac reported that the average rate on a 30-year fixed mortgage has fallen to 4.15%, its lowest level on record since 1971. Rates on this popular mortgage were 4.23% two weeks ago.
Average rates have been below 5% for almost all of the last year but the struggling economy remains just that – struggling. Experts say that the low rates are not likely to strengthen the housing market because it’s not mortgage rates (alone) that shape the market. Remember in 2006, the average rate was 6.5%, in 2000, it was over 8%. Overall, home prices and sales are in poor shape because qualifying for a mortgage these days is so difficult, unemployment rates are still over 9% and Americans are either not getting raises, are struggling to keep their debt down and/or are too nervous about the economy and even their job security to purchase a home.
Average rates on 15-year fixed mortgages are also at a record low, 3.36%. This is the third week in a row that that rates have reached record lows and analysts believe it’s the lowest ever reached for this mortgage option. Homeowners looking to refinance will often choose a 15-year fixed rate. And borrowers who qualify are taking advantage of low rates. Freddie Mac says refinancing made up 70% of the mortgage applications in the first half of 2011. Unfortunately, refinancing doesn’t provide as much benefit to the overall economy as home purchases do and the Federal Reserve expects growth to stay weak for several more years.
Average rates on five- and one-year adjustable-rate loans have also hit record lows over the past two weeks to 3.08% and 2.86%, respectively; surpassing the records they set just two weeks ago at 3.13% and 2.89%.
If you are in the market for a new home in Atlanta or real estate in Atlanta, make sure to visit Atlanta Real Estate Forum often for the latest news, incentives and deals.