Freddie Mac’s Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage (FRM) averaging 5.10% with an average 0.7 point for the week ending December 31, 2008, down from the previous week when it averaged 5.14%. Last year at this time, the 30-year FRM averaged 6.07%. The 30-year fixed rate mortgage has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971!
The 15-year FRM averaged 4.83% with an average 0.7 point, down from the prior week when it averaged 4.91%. A year ago at this time, the 15-year FRM averaged 5.68%. The 15-year FRM has not been lower since March 25, 2004, when it averaged 4.70%.
“Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all time record low since Freddie Mac’s survey began in April 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. In addition, there are not been the same net affect to the commercial real estate market.
“Lower rates and falling house prices are also making home ownership more affordable to potential home buyers. For instance, house prices fell 18% over the 12-month period ending in October, according to the S&P/Case-Shiller 20-city composite index.”
Expect homes in Nashville to stabilize and then ascend by the end of the second quarter of this year. We also expect inventory to begin to burn off by the middle of the summer.