As we discussed a couple of weeks ago, predicting mortgage rates would fall if the Government stepped in to take over Fannie and Freddie. The Government did step in and rates are falling. As of September 12, the rate on a 30 year mortgage dropped sharply, it is now at 5.93 percent. This is the lowest it has been in over five months. Bankrate.com polled the majority of mortgage experts this week and 57 percent predict even lower rates to come within the next 30-45 days.
Rates on a 15 year, fixed rate mortgage dropped to 5.54 percent. Now the rates are more inline with what a buyer would hope to pay in a monthly payment. Our old problem is still looms over the housing crises though, strict qualifying guidelines. I predict that at some point the government will step in again and change the guidelines for obtaining a mortgage. If customers, who qualify, can’t get a mortgage due to strict guidelines, it really doesn’t matter how low interest rates are. Our economy is directly hinged to the real estate industry. Once it starts moving, we will see every aspect of our economy showing signs or rebound. Our next step is to wait and see what the government does to help ease complications buyers are now facing at the banks. I believe we still have a long way to go though.