Another Crazy New Record Low for Interest Rates


Interest rates continue to slide

Nobody can say being involved in southern Florida real estate isn’t fun. We have had an amazing year to date with strong sales and shrinking inventories much of the demand fueled by interest rates that seem to defy logic. While weakness in the overall economy drives rates further down one has to wonder just how low they can go and what impact this will have the future of the real estate market.

As of Sunday, the average overnight rate for a fixed 30-year mortgage as reported by Bankrate.com was at 3.55% down another 7 basis points from where we stood the previous week and another all time record low. The benchmark 15 year fixed rate was at 2.96% also down 7 basis points from the previous weeks level while the benchmark 5/1 adjustable rate mortgage again without much logic jumped and amazing 21 basis points to 2.99% from 2.78%. Why the 5/1 ARM would buck the trend in such a huge fashion also defies logic.

Not that there is logic to any of it but those who can qualify for loans as underwriting criteria gets tougher and are able to park themselves in a home for a long time with a fixed rate at these levels should be happy campers. We have been saying this for a long, long time and I see people who have re-financed their loans 3 times over the past couple years. Nowadays “old” record rates of 4.5% we first saw about a year ago seem to be off the chart high. In fact, this update we lengthened the time span of the chart above back a little over two years ago when we first breached the 5% level.

So where do we go from here? Anybody watching the bond market and especially in countries like Switzerland where talk of “negative” bod yields are getting louder and one wonders is this a scenario that may play itself out in the good old United States. We live in interesting times and I wouldn’t bet against anything these days. Keep your eyes and ears open as rates in fact could be going lower.

Local real estate sales seemed to have hit the brakes over the past two weeks and we will dig in to those metrics in our upcoming articles…………
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Tom Priester

After spending years among the top individual performers at one of Palm Beach County’s largest and most successful real estate brokerages, Tom Priester knew there was another way to do real estate. A better way. Real estate services focused on the customer. Like the old days when the customer truly was #1. He tired of listening to why he should be going out to have his customers sign one sided buyers’ brokerage agreements. He tired of hearing how he should be selling customers why paying higher commissions, like 7% and 8%, was to their benefit. He tired of hearing how he should sell his clients on why they should be paying hundreds of dollars in additional “transaction fees”. The business had slid way too far from being focused on the customer. His customer. So he decided the time was right to be different…..by design. To start his own unique boutique real estate firm truly focused on his customers. They will now have access to a process focused on them. Only the best marketing techniques to sell their homes. No cutting corners. Commission structures based on his clients needs not his. Paradise Sharks was born out of Tom’s passion to return this business to the customer. Where it belongs. If you want a real estate experience that benefits you, just give Tom a call at 561 308-0175 or send him an e-mail at tom@paradisesharks.com. You can always pay more and receive less but that just would not make any sense. Would it?

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