Mortgage rates are approaching 50-year lows! Just a few weeks ago, analysts were predicting that mortgage rates would rise to 5.5% by the end of the summer and to 6% by the end of the year. Last week Freddie Mac reported average rates of 4.84%. HSA Associates reported that rates dropped to 4.86% on Friday – the lowest since December 2009. HSA reports on combined rates that include both conforming and jumbo. Now analysts are predicting that rates my see 4.5% this summer.
So what happened to change these predictions? The financial crisis in Europe, growing concerns over the global economy and the potential conflict between North and South Korea have created a flight to safety. Suddenly, there is significant demand for safer U.S. bonds from investors across the world. The previous worries about the Fed discontinuing their purchases of mortgage-backed securities appear abated – for now. However, the original long-term prognosis may still be a reality. These economic cycles and world events tend to be cyclical. If the perception improves, the market for mortgage securities may slow. That combined with the looming debt in the United States will push rates higher. Most analysts still expect to see rates higher in 2011 and 2012. But in the short-term, it is an incredible time to buy the home of your dreams!
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Tags: Atlanta foreclosures, atlanta mortgage rates, Atlanta new homes, Atlanta real estate, atlanta real estate market report, Atlanta short sales
