Mortgage rates closing in on recession levels
If you’ve been waiting for mortgage rates to hit 3.5% again (last seen more than a year ago), you may not have long to wait. It appears that rates are headed in that direction again with best 30 year fixed rates loans now hovering around 3.75% for the best qualified buyers.
While this is great news for buyers, the flip side is that this is causing a housing buyer rally that was not foreseen just a few months ago.
As always we need to watch Wall Street to understand why mortgage rates continue to drop in spite of good jobs numbers and increased GDP in the US. While the US economy is in recovery mode, the rest of the world is still in turmoil economically.
Economic activity has hit a 16 year low in France, Japan is officially again in a recession, and Germany is also struggling with manufacturing. To top that off, oil prices continue to fall. This is great for us as consumers, but OPEC just voted to continue to their oil production at its current pace. This affects 10 countries whose economies depend on oil production, so their economies continue to slide as well.
For home buyers in the PDX area, this is almost all good news. Home prices still remain well below 2006 levels. But of course, as mentioned in prior news, housing inventories remain low but as homes become more affordable, more buyers are out shopping. The end result is that Portland home prices will again resume their march towards 2006 high prices.