Mortgage rates at record lows, buyer opportunity an all-time high

This week Freddie Mac reported 30-year fixed mortgage interest rates averaged 4.54 percent for the United States as a whole and the North Central Region (which includes Illinois). That’s another record low.

According to Freddie Mac’s historical data, rates have dipped below 5 percent on occasion since 2009, but this level otherwise is unseen since it began tracking the data in 1971. Notably, 30-year rates hit an annual average high of 16.63 percent in 1981.

Now that the tax credit has passed, Illinois REALTORS® are reporting less buyer flurry which in part is seasonal given the typical summer lull for vacations and back-to-school. However, a major factor at play is the overhanging sense of uncertainty in America about jobs and the economy.

Still, if you are a recent trade-up buyer who sold during the tax credit period or a fence-sitter waiting for the right opportunity, this is it. Today’s combination of low rates and lower home prices has greatly increased homebuyer affordability.

Although a buyer might be waiting for an even lower price on a home, in my recent interview with IAR Convention speaker and Inman News columnist Bernice Ross, she explained how this thinking just doesn’t make financial sense. “Assume you have a 5 percent interest rate on a $200,000 house. If the price of the home would lower by $10,000 that doesn’t compare with how much interest that buyer would have to pay over the life of the loan if the interest rate goes up just one percentage point.”

Plus in many markets in Illinois home prices are gaining traction. Statewide the median price was up in June for the fourth month this year.

This entry was posted in Housing Market and tagged , by Ann Londrigan. Bookmark the permalink.

About Ann Londrigan

Ann Londrigan is Director of Association Outreach and Marketing for the Illinois Association of REALTORS®. She is responsible for increasing member engagement in and awareness for IAR Governmental Affairs and the RVOICE program as well as increasing participation in the REALTORS® Political Action Committee. She is responsible for overall marketing plans for IAR member benefits, educational products and events and is the content manager for IAR’s Facebook page and LinkedIn discussion group. She manages the IAR Welcome Center, serves as staff liaison to the University of Illinois Regional Economics Applications Laboratory, and coordinates the IAR housing stats program.

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