Philadelphia Real Estate Letter From Larry Flick

Philadelphia Real Estate Letter From Larry Flick

In June of last year, mortgage interest rates dropped to what were then historic lows. I thought they could never go lower. I was wrong. For the past week, mortgage interest rates have gone even lower than they were at the beginning of last summer – I’ve seen 30 year fixed mortgages hovering around 4%, 15 year mortgages at 3.375% and FHA mortgages between 4% – 4.25%.

Why is this happening amidst all the financial and economic turmoil? It’s exactly because of the financial and economic turmoil that we’re seeing this historic drop. Investors are anxious and are placing their funds in US Treasuries (so much for the S&P credit rating downgrade!) rather than the stock market. When that happens, mortgage interest rates tend to decrease. In this case, they have.

So what does this mean? There are some potential buyers who are too anxious to make any kind of move right now, regardless of interest rates. They will stay on the sidelines. But for those buyers who are secure in their employment and are ready to move, the time has never been better:

• Affordability has NEVER been better!

• Today’s current rates add up to increased buying power when compared to last year’s highest rates. Those who could afford a $200,000 home in January now qualify for a $224,000 home simply due to lower interest rates.

• Buyers can achieve significant savings (about 12%) on their monthly payments just because of these lower rates.

As investors shed their anxiety and gain greater equilibrium, they will once again invest in the stock market. When this happens, mortgage interest rates will rise to about where they were before this drop. Last year’s rate decrease lasted about a month. For your buyers who are more willing than not to move ahead, make sure you let them know that this is a critical time for buying a home, a time that can truly work to their advantage. Contact your Trident or Premier mortgage consultant for the latest information.

To search Philadelphia Real Estate listings for condos, homes and apartments click here.

Blog post compliments of CenterCityTeam’s Philadelphia Real Estate Blog

Frank L. DeFazio, Esquire
Prudential Fox & Roach Realtors – Society Hill
530 Walnut Street, Suite 260
Philadelphia, PA 19106
215.521.1623  Direct
610.636.4364  Cellular
888.308.1148  Fax
[email protected]
www.CenterCityTeam.com