30-Year Fixed at its Lowest Average Rate This Year
Posted by David Schneider | January 14, 2008

With the subprime mortgage lending era ending, homebuyers are looking forward to the upward swing of fixed mortgages. In recent months, 30-year fixed rate mortgages have stabilized, making them highly sought after in the buyer’s market. Experts predict the fixed rate will stick around for the end of 2007, which puts potential buyers in shopping mood.

30-Year Fixed at its Lowest Average Rate This Year — Say Goodbye to Subprime

Mortgage industry experts are looking forward to the end of subprime loans, which had a large hand in the home selling industry’s poor performance. This doesn’t mean that homebuyers should be thanking the subprime mortgage lenders, many of which are now out of business thanks to foreclosures and defaulting loans. However, until the need for mortgage loans becomes harder to obtain, buyers are hopeful and advised to take advantage of the deals on 30-year fixed rate mortgages.

30-Year Fixed at its Lowest Average Rate This Year — Looking for a Turn in the Economy

The downside to the positive mortgage rates is that unless America’s economy takes a turn upwards, mortgage loans could become more expensive and drive the rates back up. Fortunately, the sluggish economy is driving down the price of houses, making it more likely that a house on the market right now will sell.

Rates Could Dip Lower

Some analysts are already seeing that mortgage rates are dipping lower into the high fives, with fixed rates hovering between 5.73 percent and 6.10 percent. This is a significant dip from two years ago, when subprime mortgages were just beginning to gain speed.

People are starting to shop the housing market, looking to take advantage of great rates before they change again. However, the likelihood of an interest rate climb doesn’t look like it’s going to happen until after the New Year. Now is the perfect time to shop since most closings take between 30 and 45 days.

What This Means for Sellers

If you are considering selling your home, now might be the perfect opportunity. There is currently a steady market of potential buyers, as the market begins its upswing for the end of the year.

However, sellers must realize this is still a tight market. Homes are under rigorous scrutiny, as buyers want the absolute best for their dollars — even if a 30-year fixed rate is exceptional, buyers are still holding out for a home in top condition.

30-Year Fixed Rate — Final Words of Caution

Before you head out the door with your checkbook in hand and ready to make the purchase of a lifetime, be aware that home prices have to be low in order to make the low 30-year fixed rate work for you. While some buyers take advantage of low fixed rates, they fail to realize that the home of their dreams may still be too pricey.

This is probably the biggest problem that brokers and realtors are facing. However, it shouldn’t derail you from purchasing. As anyone who deals heavily in the housing market knows, there is always room for bargaining.

By and large, most everyone in the housing industry is hopeful that the housing slump will end with the low fixed rates currently on the market. Almost as hopeful are those looking to recover from the subprime market. With buyers wanting to cash in on 30-year fixed rates and sellers regaining faith that this is a prime time to sell, spirits throughout the housing industry are looking brighter.