Jumping on a Bargain While Mortgage Rates are Down

As consumers continue to recuperate from the economic crisis of several years ago that remains hovering over the country, the fear of making any major financial moves is stopping many from jumping on a bargain while mortgage rates are down. While some continue to be struggling and a home purchase may appear to be impossible, there are others who are just holding back.

The fall of home prices over the years creates a unique opportunity for many people. Due to foreclosures, short sales and many ordinary home sales, home values have dropped to affordable prices. This is not something that happens often and should be looked at carefully. Had home prices continued to rise at the fast rate that was occurring back during the housing boom, eventually very few would have been able to afford a home. The result of falling home prices opened the market back up to more consumers. Since fewer consumers have made home purchases, the supply is there but the demand is light in most areas. This gives home buyers the advantage for obtaining a home that is the perfect deal and more within their means. Even government programs, such as FHA loans, are there to help borrowers who don't have enough funds for the full down payment. With such a large military in the U.S., VA loans are also available to help this segment of society and allows a home purchase with a zero down payment. These government programs promote homeownership, yet so few are taking advantage of them.

Mortgage rates are at historical lows, in fact, so low that it is difficult to ever imagine this happening. According to Freddie Mac, in January, 1982 the fixed mortgage rate for 30 year loans was 17.48% (2.2 points). It is even more difficult to imagine paying this amount of interest for a home purchase for 30 years. The jobs market was also struggling back then and by December of 1982, the unemployment rate was at 10.8%. While economic conditions today may be difficult, it is still better than it was in the 80s. According to records, mortgage rates have never been as low as they are today, yet many consumers are waiting for them to fall further, which may or may not happen. Even special programs, such as HARP 2.0 and FHA streamline refinance, are available for homeowners to take advantage of refinancing to these low mortgage rates, yet so many have not yet applied.

According to REIS, a real estate data firm, apartment rents rose to record levels in the second quarter of 2012. As consumers stay out of the home buying market, vacancy rates have been pushed to their lowest levels in more than a decade by the demand for rentals. In 82 markets tracked by REIS, average rents have increased despite the condition of the economy. In 74 of those markets, average rents have reached record levels and top $1,000 per month on average in 27 of them, such as Miami and Seattle. Many consumers are now paying higher rent than they would if they were to purchase a home.

There is definitely an opportunity available today as there has never been in the past. Being able to hear updated news and data everyday may be keeping many borrowers from stepping up to these favorable circumstances due to fear of what might happen in the future of the economy. While being financially responsible is important, today's market is practically handing consumers something of which may never happen again. Consumers who want to be homeowners need to seriously consider it now and homeowners who want more money in their pockets, also need to consider mortgage refinancing now.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.