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Mortgage Rates in the United States Continue to Fall

limbo-stick-desc-09At this time last year, mortgage interest rates were at historical lows, and it was almost a sure thing that rates would do nothing more than go back up according to a lot of reputable economists and analysts.  But, to prove the volatility of the mortgage market, mortgage interest rates have ended the year at shockingly low rates.  The average long-term (30-year) mortgage rates in the United States fell for the fourth week in a row.  According to The New York Times, the mortgage giant “Freddie Mac said the nationwide average for a 30-year mortgage declined to 3.89 percent this week, from 3.97 percent last week.  It is now at its lowest level since May 2013.”  This is especially striking news given that at that time last year, analysts were predicting the rates to climb up to 5% by the end of 2014.  The reason being that the Federal Reserve began their plan to slim down and eventually phase out their stimulus plan, which began in January 2014 and ending in October 2014, and yet here we are in December of 2014 and the anticipated 5% rate still never came about.  Instead, they slid down to a record low that had also been experienced during the 2013 refinancing boom—a time when rates were so low that anyone who possibly could refinance their home, would refinance their home.    The rates are said to have fallen due to slowdowns in the European and Chinese economies, and the beginning of a recession in Japan.

Pinch me.  I am about to report positive news.  Am I dreaming?

Last week’s news was also joined by some additional optimistic news—the number of people seeking unemployment benefits slipped down below 300,000, according to data that was released on Thursday, December 4th 2014.  The applications for unemployment benefits fell a total 17,000 to a seasonally adjusted 297,000 according to the Labor Department.  The New York Times notes, “Applications for benefits are a proxy for layoffs.  As fewer people seek unemployment benefits, it suggests that employers are holding onto more workers and potentially looking to bolster their hiring.”  This news means wonders for the economy as a whole.  It is clear that the economy, and United States’ businesses are in the green.  As unemployment applications have remained suppressed under 300,000 for almost the past 3 months, the low level suggests employers anticipate strong future gains and growth.  The average for unemployment claims has decreased 9% in the past year.  The trend of lower unemployment applications is said to have plateaued, but it is still exhibiting an incredibly low rate.  Also, strong payroll numbers have been observed.

For those reading this, it may be wise to put holiday shopping on hold and look into available homes.  Low rates do not last forever, and the difference of half a point on an interest rate can mean thousands of dollars over the life of the loan.  This is the cost of waiting—In fact, it can even exceed half a point, meaning more money out the window.  At a time when United States businesses are exhibiting strong payroll and even heavier hiring, job security is more realistic and further accentuate the point that there is no better time than the present moment to fulfill a goal.  It sure would be worth it to get in touch with a lender, lock an interest rate, and get started on the process of one of the biggest and most essential investments that you will make in your life.

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