Mortgage Rates Continue to Drop

As reported by CNNMoney.com - "Mortgage rates hit 4 1/2 year low":

Mortgage rates fell again this week, following the government's efforts to assist the troubled housing market.

Government sponsored mortgage lender Freddie Mac said Thursday that fixed rates on 30-year mortgages averaged 5.47% for the week ending Dec. 11. That's down from 5.53% last week and well below 6.11%, which is where the rate stood at this time last year.

We have to go back quite some time to find equally low rates:

The 30-year rate has not been this low since March 25th, 2004 when it averaged 5.40%.

....

The 15-year fixed rate mortgage this week averaged 5.20%, which is down from 5.33% last week. A year ago at this time, a 15-year fixed rate loan averaged 5.78%.

The 15-year rate has not been this low since February 7, 2008, when it averaged 5.15%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.82% this week, up from last week when it averaged 5.77%. At this time a year ago, the 5-year ARM averaged 5.89%.

And the one-year Treasury-indexed ARM averaged 5.09% this week, up from last week when it averaged 5.02%. Last year, the 1-year ARM averaged 5.50 percent.

Wow. Let's see. You're looking to buy your first home. You can get a loan. You have money for the down payment and you're still on the sidelines? Why?

Could prices drop more? Most likely they will. Would it be a surprise in consideration of the overall economic market conditions? However, many markets have already seen huge drops, there's still lackluster demand, and rates are back to better than bargain basement levels.

Remember, if you're planning to stay in your home for the next 5-7 years, stop worrying about the market falling another 10%. It's really unimportant since you can negotiate more than 10% off of current market values due to existing conditions in most housing markets. Add phenomenal rates to the cocktail .... stop being greedy. Greed got us here. Get why the gettin' is good.

Or, perhaps you're just that good. Your crystal ball will be able to pinpoint the actual hour when housing officially bottoms. When it does, do us a favor and drop us a line.