Friday, September 25, 2009

Mortgage Rates Slip Below 5% for 30-Year Fixed Loans

What makes a "perfect storm" for first-time buyers seeking to enter the still-difficult-to-penetrate Los Angeles home market?

Deeply discounted home prices. Check.

Government support. Check (although the $8,000 first-time buyer credit is set to expire November 30.)

And, finally, low mortgage interest rates. Check.

Buyers, prick up your ears. Interest rates for 30-year fixed mortgages have crept below 5% and are again are at generational lows.

The home mortgage market, propped up by more than $1 trillion in government money, is flashing a strong "buy" sign to house hunters.

Extending a summer-long slide, the average interest rate on new 30-year fixed-rate loans nationwide has broken through the 5% barrier to 4.97%, nearing the lowest level in decades, the Mortgage Bankers Assn. reported this week...

Several factors are fueling the trend, including growing confidence that the economy is recovering, an emerging consensus that housing prices are at or near a bottom, and the federal government's push to keep mortgage rates low. [Los Angeles Times]
Mortgage rates fluctuate -- as does the government's commitment to cram down interest rates to promote home-buying. Benefit from these ultra-low interest rates while they are in effect.