Interest Rates Hit Yet Again Another All Time Record Low
Interest rates continue to head lower which is great news for homebuyers and those who have not yet taken advantage of these once in a lifetime rates in a re-financing situation. However, the reasons for the downward pressure, slowing economic growth and worries about the future, are certainly not good news for the continued recovery of the real estate markets here in South Florid and elsewhere around the country.
As of yesterday morning, the average overnight rate for a fixed 30-year mortgage as reported by Bankrate.com was at 3.8% down 2 basis points from where we stood one week ago today. The benchmark 15 year fixed rate is at 3.04% down 2 basis points from last weeks level while the benchmark 5/1 adjustable rate mortgage remained unchanged at 2.71%.
Interest from investors in property in the area continues to gather steam and the number of bids and prices realized on new listings continue to amaze. Those with cash looking for what they consider a more solid, and safer, return that they can get elsewhere are snapping up everything that is thrown at them. Many are counting on inflation heading our way and real estate in the end will be a beneficiary to higher prices throughout the economy. Time will tell.
Treasury yields, especially on the 10 year bond which ois most closely tied to interest rates continue to ease bringing this continued downward pressure on mortgage rates. Last week marked the 4th straight week of declines bringing the rates on a 30 year fixed mortgage from just over 4% down to teh 3.8% where we stand today. Gross Domestic Product rose at an annualized rate of 2.2% so the good news is there is at least some growth but the numbers are disappointing. Couple this news with the unemployment rate which continues to be problematic and with th election heading our way one would not expect much change in the coming months.
Inventory levels for investment grade properties continue to be anemic……..