Lowest Interest Rates in History – What it Means to Bucks County, PA
Interest Rate News
Freddie Mac announced on May 3, 2012 that the 30-year fixed-rate mortgage interest rate is at an all time record low. Lowest-ever rates and still-recovering property values are creating an interesting real estate market for both buyers and sellers.
According to Frank Nothaft, vice president and chief economist at Freddie Mac, “Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week.”
The national 30-year fixed rate averaged 3.84%, down from 3.88% last week. 15-year rates averaged 3.07%, down from 3.12% last week. Freddie Mac has been keeping records of interest rates since its inception in 1970. See Freddie Mac’s site for more interest rate history.
What it Means to Bucks County
As I have been observing for the past few months, the real estate market in Yardley & Newtown and all over Bucks County has experienced the most active spring market, especially for sellers, in years.
Correctly priced houses are selling much quicker than they have in the past few years, and we have even seen a few multiple offer situations.
Everyone knows that interest rates have been incredibly low, for some time. The recent announcement by Freddie Mac, confirms exactly how low, historically, interest rates are.
I believe that one of the factors that may be helping the increase in activity this spring, is that buyers are slowing coming to the realization that interest rates will not stay at this level forever. I think that we are seeing a bit of an increase in buyer motivation, because many buyers do not want to miss this incredibly opportunity to take advantage of lower home values, along with incredibly low interest rates.
I also believe that many sellers are afraid of the market, because of all of the negative publicity, so sellers who can avoid selling in the current market environment are not putting their houses on the market. So in many cases we see lower inventory, along with increased demand.
This is not to suggest that we are back to the double digit, crazy days of real estate. I am suggesting that the dynamics in the Yardley, Newtown and Bucks County real estate market are much more balanced today than they have been in years.
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