Stop Waiting to Buy!

As homes Decrease in Value, Rates are moving up!

The Federal Reserve Board's decision last week to leave the federal funds rate static at 2 percent has so far failed to put the brakes on rising mortgage rates, which climbed to their highest level in over nine months to 6.45 percent for a 30-year fixed-rate loan, according to Freddie Mac. That was up from 6.42 percent the previous week and the highest rate since reaching 6.46 last September. Interest rates on fifteen-year fixed-rate mortgages rose from 6.02 percent to 6.04 percent last week. Adjustable-rate mortgages (ARMs) also climbed: a five-year ARM moved from 5.89 percent to 5.99 percent, while a one-year ARM rose from 5.19 percent to 5.27 percent. Even so, interest rates were still lower than they were for the same week in 2007. A year ago, 30-year fixed-rate mortgages were at 6.67 percent, 15-year fixed loans averaged 6.34 percent, five-year ARMs were at 6.3 percent and one-year ARMS were available at a 5.65 percent rate. Observers say the recent week's increases reflect the market's growing concern over inflationary pressures and uncertainty over how the Fed may react in the future.

(C.A.R. July 3rd, 2008)