Sue Fox, @Properties. Direct 773.816.1788

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Mortgage interest rates at record lows

filed under: Bungalows, Buyers, Chicago home prices, Irving Park, Market conditions posted on August 22nd, 2011

IRVING PARK: This pretty frame bungalow, currently priced atHOME SWEET HOME IN IRVING PARK? This pretty frame bungalow, now priced at $285,000, has been on the market for nearly a year. At today’s interest rates, it would cost about $1,383 per month to live here (including property taxes and insurance) for a buyer who put 20% down. Five years ago, a similarly priced home would have cost $1,716 per month due to mortgage rates hovering around 6.5%.

Despite all the volatility in the stock and bond markets, mortgage rates are now at their lowest point in more than 50 years. The average 30-year fixed rate mortgage fell to 4.15% last week, according to Freddie Mac’s Primary Mortgage Market Survey. Rates have been below 5% for awhile now; previously, the record low (set last November) was 4.17%.

The extra-low interest rates make home buying more affordable than ever, particularly in Chicago, where home prices have dropped more than 30% in recent years. If you’re wondering where to find these rates locally, Guaranteed Rate is one Chicago lender now offering a 4.15% rate on a 30-year fixed loan, while a 15-year fixed mortgage can be had even cheaper: 3.525%. The rate for 5-year adjustable rate mortgage is just 3.125%.

Money to buy a home — if you can qualify for the loan! — is now incredibly cheap. It’s hard to find even a car loan or a student loan with such rock-bottom rates, let alone a mortgage. Mortgage rates closely track yields on U.S. Treasury bonds, which have also dipped. The 10-year note hit a record low on Thursday, falling below 2 percent to 1.99 percent.

If you’ve been considering buying a home (whether to live in yourself, as a second home, a home for your child or as an investment property to fix up and sell — all of which I’ve had buyers recently searching for)  now may be the time to act. It is rare to find both interest rates and prices simultaneously so low.

Written by Sue Fox //

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