This week, the average interest rate on 30-year, fixed-rate
mortgages dropped back to its record low of 3.91%, falling from 3.95% the
previous week. Interest rates on 15-year, fixed rate loans also remained low, averaging
3.23% nationwide, down very slightly from last week’s 3.24% rate. Federal
Reserve Chairman Ben Bernanke has lowered interest rates to all-time lows and
kept them there in an effort to strengthen the nation’s housing market. Bernanke
has called recovery of the housing market essential to U.S. economic recovery.
“Restoring the health of the housing market is a necessary
part of a broader strategy for economic recovery,” Bernanke said in a letter to
the Senate Banking and House Financial Services Committees reported by Bloomberg News .
Bernanke’s letter accompanied a 26-page report on the current state of the housing
crisis and the plight of federal mortgage giants Fannie Mae and Freddie Mac.
The Federal Reserve has kept mortgage rates anchored at
record lows for the past 9 consecutive weeks, refusing to push interest rates above
4% since early November. Bernanke has vowed to keep interest rates low through
mid-2013 but is under considerable congressional pressure to find additional
ways to goose the economy. The impact of the 2012 election on the balance of
power in Washington could also affect the direction of economic recovery.
The bottom line, warn experienced Destin Realtors [http://www.gulfcoastrealestatesales.com/about.php],
is that, while mortgage rates are expected to remain fairly low through 2012,
it is unlikely that they will remain under 4% much longer. As the economy
continues to recover, federal economists are predicting a gradual rise in mortgage
interest rates to 4.5% by the end of 2012, hitting 5.4% in 2013. If you’re
considering buying a home in the Destin [http://www.destinrealestatesales.com/destin.php]
area, the time to buy is now while mortgage rates are still at record lows.
