Mortgage Rates Drop Again

The average rates on fixed mortgages fell again this week and they remain near historic lows, a trend that has supported a recovery in housing, the AP reported today. This decline was preceded by a slight uptick in rates caused by a strengthening economy. Details of the article:

Freddie Mac said Thursday that the average rate for the 30-year loan fell to 3.54 percent from 3.63 percent last week. That's near the 3.31 percent reached in November, which was the lowest on records dating to 1971. The average rate on the 30-year loan has been below 4 percent now for a full year.

Kathy Orton, a real estate blogger for The Washington Post, quotes Frank E. Nothaft, Freddie Mac vice president and chief economist, on the reasons rates continue to stay so low:

Low and stable inflation is placing downward pressure on fixed mortgage rates. Annual growth in the consumer price index has remained at or below 2 percent for the past four months, and for the producer price index even lower. This, in part, is why the Federal Reserve monetary policy committee on March 20th lowered the upper end of its inflation forecast for 2013. In addition, our March outlook calls for 30-year fixed mortgage rates to remain below 4 percent throughout this year.

These near record low mortgage rates are fueling home sales and refinancing, which in turn is boosting the economy. All of this is just in time for the spring home-buying season.

As always, please contact me, Mynor Herrera, for expert advice on everything real estate. I am licensed in D.C., Md., and Va., and I specialize in Bethesda and Chevy Chase, as well as the subdivisions of Rosemary Hills, Rock Creek Forest, East Bethesda and Whitehall Condominium.