If you’ve been distracted by the federal government shutdown, political dysfunction, stock-market volatility and reports of rising mortgage rates, it wouldn’t be surprising if you concluded: No way is this a good time to even think about buying a house or putting one on the market. Things are too crazy. Nobody’s paying attention to real estate anyway.
But take another look. Some of the real-estate fundamentals have been changing for the better. Take mortgages. They’ve gotten cheaper. As of last week, you could readily find conventional rates averaging 3.87 percent for five-year adjustable-rate home loans, or conventional 30-year loans at fixed rates of 4.45 percent, according to investor Freddie Mac. That compares with late last year, when they were at 5 percent or higher, depending on an applicant’s credit profile.
Sure, rates are slightly higher than they were a year ago, when the 30-year fixed rate averaged 4.2 percent. And yes, when you take out a five-year adjustable loan, your payments are fixed for the first 60 months and then are subject to adjustments — up or down — once a year. So you take on future rate risk in exchange for a super low rate the first five years.
But combined with other recent trends — growing inventories of homes available for sale, slower price inflation and even modest price reductions — the decline in mortgage rates should be encouraging for anyone seriously in the market for a home. And even for heads-up owners looking to sell.
- New mortgage applications of home buyers nationwide during the week that ended Jan. 11 soared to their highest level since 2010 — and were 9 percent higher than they were the week before, according to the Mortgage Bankers Association. Clearly the word is out among buyers who learned about the rate declines: They’ve been rushing to nail down financing at a brisker pace than is typical for this time of year.
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