30 Year Fixed at a 37 Year Low.

Yes Virginia, there “is” a Santa Claus.  Well that’s how I felt yesterday when I saw that mortgage interest rates had adjusted downward again.  Below is a reprint from the Freddie Mac Site, but I saw that Provident Bank yesterday had a 30 year conforming rate of 4.875 (with 1 point).  I had an email from a colleague where they saw a mortgage broker at 4.75 with no points.  So . . . let the games begin!

Compilation of Weekly Survey Releases for 2008

There are other positive signs in the marketplace as well.  Remember the huge bailout plan to purchase troubled mortgages?  Well part of that plan is being shelved.  Lawrence Yun, NAR Chief Economist writes (Source GHVmls economic and market watch report/Oct) that “Instead the money will be used to support securitization for consumer financing.”  Yun adds that the goal is to get capital to lenders so that they can start issuing loans to consumers and companies.  Yun shares that LIBOR rates (the key rate measurement of liquidity flow in the financial system) have begun to thaw.  But those stubborn residential mortgage rates carry a high spread above Treasury rates, commercial mortgage loans are non-existent and the banks are still not lending to small businesses.

The notwithstanding the above information, the most important thing I want to communicate is YES THERE ARE LOANS OUT THERE ! If you have good credit, (read my post on FICO Scores here)a stable job and some $ to put down, you can get mortgage money.   Property values have digressed to levels not seen in years.  Improved affordability has led to improved home sales.  The huge inventory is being worked off.  As I’ve told you for months now, a shrinking inventory is another sign that the real estate market is stabilizing.  Yun goes on to warn though that while these signs are encouraging, more must be done.

NAR, the National Association of Realtors has proposed that the government buy-down mortgage interest rates to ensure fixed low rates for home buyers.  NAR has also presented a plan to Congress that would eliminate the repayment feature of that $7500.00 first-time home buyer tax credit.  NAR has proposed that this credit be offered to all buyers and that higher FHA and conventional loan limits be made permanent.  This should greatly aid in the housing recovery.

We all know that consumer confidence is at an all time low, but we also know from history that the journey to wealth accumulation begins with owning ones own home.