Mortgage interest rates moved slightly lower this week according to Freddie Mac. Despite a slight rise in interest rates last week to an average of 3.41% for a 30-year fixed-rate home loan for a strong borrower, the rate lowered to 3.39% this week. The 15-year fixed-rate also dropped from an average of 2.72% last week to 2.7%. To get these rates, borrowers paid an average of 0.7% of the loan balance in upfront fees to the lender. The rates are hovering near the all-time lows of 3.36% for the 30-year and 2.66% for the 15-year, which were set last month. (And I thought that my mortgage interest rate of 5.875% when I bought my home back in 2006 was an amazing rate!)
For a home buyer, continued low interest rates only increase the competition for homes that are in short supply in the Los Angeles area. Therefore, a home buyer will need to make a more competitive offer – either by offering a higher price and/or making an offer that is less dependent on financing. On the flip side, these low interests rates greatly benefit a homeowner seeking to refinance his or her property. A down payment in the case of a home buyer or equity in the case of a refinancing homeowner of 20% of the home’s value is typically required to get these rates.