Home Loan Rates Fall to 20-Year Low
Borrowing money to buy a home has not been cheaper since Richard Nixon was President and the ink was still wet on the Vietnam War peace treaties.
The average interest rate for a 30-year fixed mortgage tumbled for the 11th week in a row this week to 7.44%, the Federal Home Loan Mortgage Corp. reported Friday, the lowest rate in more than 20 years.
It fell from 7.53% last week, and it has not been lower since Feb. 9, 1973, when the rate was 7.43%.
“Now is probably a good time for home buyers and homeowners to lock in a rate,” said Robert Van Order, chief economist for the Washington-based agency known as Freddie Mac, which buys up mortgages and repackages them for sale to investors.
Mortgage rates have been falling steadily, pushed downward in concert with the rallying market in U.S. Treasury bonds and by the last few years of increasingly lower interest rates from the Federal Reserve.
Fed moves to cut rates have been a reflection of its desire to stimulate the moribund national economy by making borrowing less expensive. The bond rally reflects a mix of investor views that President Clinton’s economic plan will both slow the economy and cut the deficit.
What the lower rates mean to the consumer is more cash in the pocket and, at least as far as borrowing is concerned, a greater ability to buy a home.