Mortgage rates fell today for the first time ever below 4.0%.
And thanks to the Fed and their new plan to sell off short term securities in exchange for purchasing longer term ones – a move that effectively lowers both long term mortgage rates and savings rates – mortgage rates could fall even further.
So if you happen to be in the market for a new home loan or are contemplating refinancing your existing loan, you’ll currently be met with spectacularly low rates. According to our database of 30 year fixed rate mortgages, today’s APR’s are as low as 3.83% in Los Angeles as well as 3.87% in New York.
However, even though rates hit a record low today, it has been no secret that they’ve been free-falling for a few years now. Most mortgage shoppers that have been sitting on the fence, reluctant to pull the trigger on a loan, have undoubtedly been weary of jumping into the market because each week has seemed to have featured a new all time low.
Contrary to the low rates though is the overall affect on home sales. In general home sales have been sluggish since the housing market collapse of ’07 and ’08, but 2011 is actually turning out to be the worst year in well over a decade.
This move by the Fed to indirectly lower rates across the board could turn out to be a stimulating one for the economy as a whole, but more home owners are going to need to be approved for refinancing. It does little good to have record low mortgage rates when only the most immaculate of credit scores can take advantage of them.