Home mortgage rates are down.
It’s good news if you’re buying or refinancing a home, according to Bill Malkasian, President of Wisconsin Realtors Association. “So the buyer gets really sort of a double surprise this summer. One is there’s a lot of choice, and the second is low rates.”
The uncertainty in Europe is contributing to record low mortgage rates in the US — at 4.84% for a 30-year fixed-rate home loan, according to Freddie Mac. Malkasian says low rates could reduce the large inventory, helping to normalize the industry. Home-owners hope to refinance and take advantage of the lower rates, while others might wait around for a better deal, but that could backfire.
Malkasian says the lower rates won’t remain low for very long. “Well, what I would do is this: Many institutions have what are called rate-lock type programs. Sometimes what you can do is you can lock the rate, but if the rate goes down further go can pay an additional amount to get that lock.”
Malkasian stresses, there is money available for eligible consumers. Existing-home sales increased 7.6% in April, partly motivated by the federal tax credit and low mortgage rates, according to the National Association of Realtors. Malkasian says the Real Estate industry is looking at the second half of the year as the true barometer of its health, now that government incentives have expired. Some economists argue that low mortgage rates alone won’t be enough to jump start the market.
Meanwhile, homebuilder confidence has increased for the second consecutive month to the highest level it’s been since August 2007, according the National Association of Home Builders/Wells Fargo Housing Market Index.