Singer Island Condo Market: Week in Review – September 13, 2014

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Mortgage rate trendThere are 148 condos for resale on Singer Island; 5 condos are currently pending. No condos sold within the past 7 days.

The average rate for the 30-yr. fixed mortgage barely moved this week, giving homebuyers time to lock in relatively low rates. The rate increased slightly to 4.12 percent this week from 4.10%; keep in mind the year started with the rate at 4.53 percent, still remaining low by historical standards.

The average 15-year fixed mortgage rate moved slightly to 3.26% from 3.24 percent last week.

The majority of mortgage industry experts (57%) polled by Bankrate.com expect rates to remain relatively unchanged over the next 30 to 45 days; with only 29 percent predicting rates will increase and 14% thinking rates will go lower.

Throughout the year, mortgage rates have defied expectations.  House hunters who were bracing for rates to increase instead saw them fall and then plateau in recent months, settling in at their lows for the year. The trend continued this week as seen by the slight increase in rates.

Early in the year, when it looked like the economy might pick up steam, Freddie Mac expected that the average rate would rise to 5.1 percent by year’s end. Since then, it has pulled back its projection to 4.3 percent, said Len Kiefer, Freddie’s deputy chief economist.

Kiefer noted that rates on a 30-year, fixed mortgage have not moved more than a tenth of a percentage point on a week to week basis all year — a first since 1977, and there’s no reason to expect they will move much as the year winds down. The recent flat-lining of mortgage rates has to do with the U.S. economy’s lackluster growth, as well as political tensions around the world.

“When the economy is doing better, people take more risks and demand more homes, which pushes up mortgage rates,” said Kiefer of Freddie Mac. “When the economy is not growing, it keeps interest rates down.”

But optimism about the economy faded this year after a brutal first quarter, when the economy contracted.  The bad economic news helped keep rates low for the first half of the year, and international events are expected to keep them down through December.

With unrest in the Ukraine and the Middle East, and economic turmoil in some European countries, investors across the globe are clamoring for relatively safe U.S. bonds. When demand for long-term bonds is high, the yield falls on long term investments. That ultimately translates into lower rates on 30-year, fixed rate mortgages, which are long-term investments.

But just because rates are low, that doesn’t necessarily mean that people should be scrambling to buy a home, said Greg McBride, chief financial analyst at Bankrate.com.Historic Mortgage Rates

“I don’t think you should rush to buy a home out of concern about mortgage rates any more than you should rush to get married because there’s a sale at the bridal shop,” McBride said. “You should buy a house when you’re financially ready to do so and your life circumstances dictate it.”

In other words, buy when you’ve saved for a down payment, paid down your debts, and boosted your credit score – which ultimately should help you secure a low rate on a mortgage.

And thank your lucky stars that you’re not dealing with 1980s-era rates.

 

For more information on specific condominium sales activity contact Jeannie at 561-889-6734 or email her at [email protected].

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