Rates at 4 year lows, if you can get them.....

It's a good time for buyers  who have waited to purchase property. Rates are now at a 4 year low on 30 year mortgages, averaging 5.47%.  The rate has not been lower since March of 2004 when the rate averaged 5.40%. 

 What does this mean?

For borrrowers with credit scores of 740 and above, the rate is even lower, at 5.125% with no points or origination fees according to the Wall Street Journal today. Also, rates are down so much that even borrowers with credit scores of 600 to 700 could find it a goood time to refinance.  However, these borrowers with lower credit scores will wind up paying as much as a half a percentage point more because of extra charges by Fannie Mae and Freddie Mac and those whose credit is weak or have insubstantial equity in their homes will not be able to qualify. 

So with good credit, a purchase or a refinance may make sense now.  Remember that with ONE percentage point drop in interest rates, a borrower gains a full TEN percent in purchasing power.

Personally, for the East Side of Providence and surrounding areas, I have noticed good spots in the market where opportunity exists, and those areas where the inventory is scanty.  The single family market under 400K is in short supply of attractive inventory as the properties in good condition sell quickly and as sellers have pulled their properties off the market in hopes of relisting in spring. The upper end of the market, provided one can afford it, offers some very attractive inventory and a better supply from which to chose.

If you have waited, and are renting, I would not wait much longer to jump in.  Just make sure you have the fundamentals in place: a 20% downpayment, good credit scores, and debt to income ratios' and importantly do not overextend yourself. 

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