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Good News For Solano Home Buyers: Interest Rates Drop Back Down This Week

April 17th, 2010 categories: Loans / Financing

There’s been a lot of talk in recent months (including right here) about what would happen to interest rates once the federal government stopped buying mortgage-backed securities and mortgage Rates Drop To 5.07pricing was left solely to the free market.

The prevailing sentiment at the end of March was that rates would go up by about a half-percentage point in the coming weeks. And that’s exactly what started to happened when the calendar changed from March to April.

As I reported last week, Freddie Mac’s weekly mortgage survey on April 8, showed that rates had reached an 8-month high at 5.21%.

So we all waited with baited breath for this week’s report to come out, wondering whether we’d see another 1/8 point jump in the rates.

Well, this week, the mortgage market did an about-face and rates are again right back to where they were on April 1, which is a very encouraging sign.

According to Freddie Mac’s weekly survey (which appears on the left sidebar of our web site), rates for a 30-year fixed-rate mortgage (with 0.6 “points”) averaged 5.07% nationally this week. That’s down from 5.21% a week ago and even lower than it was the first two weeks of January.

So what does this mean for Solano County homebuyers?

Well, as I wrote in that same post on April 8, on a $200,000 loan, for every 1/4% change in the rate, the payment goes up or down about $30/mo. and the loan amount you qualify for changes by about $5,000.

Earlier this year, there was a great fear that once the government got out of the mortgage-buying business, rates would immediately skyrocket. That fear was tempered somewhat as the end of March approached, but most experts still expected a 1/2% jump in relatively quick fashion.

So seeing rates back to the same point they were the day after the government exited the mortgage purchase arena is very welcomed news.

Keep in mind that your own mortgage lender will likely quote rates that are slightly different than what appears in the Freddie Mac chart, since that is a national average. Local factors and things like credit scores, down payment and loan type can all affect your interest rate.

But regardless of the number your lender quotes you, it definitely should be lower today than it would have been a week ago. And that’s certainly good news.

I’ll keep tracking it. You can too, simply by coming back regularly and checking the Freddie Mac box on our web site. The rate survey usually comes out on Thursdays.

If you’re just starting out or don’t have a lender, please contact us and we’ll be happy to recommend a reputable local lender. To search for homes in Solano County direct from our own MLS feed, be sure to visit our Home Search page and contact us for further details on any homes that interest you.

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This entry was posted on Saturday, April 17th, 2010 at 12:03 pm and is filed under Loans / Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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