Interest Rates Drop to the Lowest Level On Record!
Thanks Criggchef for this flickr image.
We are currently seeing some amazingly low interest rates. Rates on loans less than $729,000 fell to the lowest level on record for the second consecutive week after the Federal Reserve launched a new effort to assist the staggering U.S. housing market. Yet, also interesting is that rates on loans larger than $729,000 are abnormally low as well.
With a loan amount of $1,000,000 and 75% Loan-to-Value:
| Purchase Price | $1,333,333 | |||
| Loan Amount | $1,000,000 | |||
| Loan Program | Rate | Points | APR | Payment |
| 30 Yr FRM Int Only | 6.000% | 1.000 | 6.142% | $5,000 |
| 3/1 LIBOR ARM Int Only3/1 | 4.500% | 1.000 | 4.629% | $3,750 |
| 5/1 LIBOR ARM Int Only | 4.750% | 1.000 | 4.881% | $3,958 |
| 7/1 LIBOR ARM Int Only | 5.000% | 1.000 | 5.133% | $4,167 |
| 10/1 LIBOR ARM Int Only | 5.250% | 1.000 | 5.385% | $4,375 |
We are big believers that it is impossible to time the bottom of the real estate markets. Yet, what we can assess is the current opportunity in the market relative to other times in history. Currently, rates are reaching historical all time lows while at the same time buying conditions and available residential housing inventory are creating abnormal Bay Area buying opportunities. This market is a prime residential buying opportunity for individuals and families that are endeavoring to purchase and live in their homes for the next 7-10 years.
One only has to look at the evening news to see that the National residential housing inventory has been seriously devalued over the last 2 years. Yet, the story that is not being told is that much of this Bay Area housing stock is now being sold with multiple offers. We know for we have been watching these offers begin to pool as rates have fallen. So, with this recent shift in financing over $729,000, we are also now beginning to witness a huge opportunity in the $700,000-$2,000,000 market. Many opportunities are beginning to present themselves to those that are looking for long term ownership (7-10 years) and can afford to ride out the many ups and downs we will inevitably see over the next couple of years.
