Why have Interest rates dropped in January 2015

 

3514 Malagrotta Circle. Cape Coral Florida 33909

The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream home, might think that they should wait to buy, because rates may continue to fall.

A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the crude oil price.

“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.”

You may have noticed that filling your gas tank has become substantially less expensive in recent months. A welcome change from the close to $5 a gallon that many Americans were paying this time last year. The average US household is projected to save around $550 in 2015.

So what does that have to do with Interest Rates?

NAR explains the correlation like this:

“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”

Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%.

“The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.”

How long will rates stay low?

No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen.

“If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.” 

Don’t wait too long

The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015.

Bottom Line

NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.”

If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.

 

 

 

 Listing and Selling Southwest Florida Homes, Condos Waterfront & Luxury Homes!

 

 

Joe Kendall BROKER "Broker Joe"

Keller Williams Realty Fort Myers & The Islands,

16 years of experience to offer You!

Fort Myers / Fort Myers Beach / Cape Coral / Bonita Springs / Naples/ Sanibel Island 

Search all the homes for sale located in Southwest Florida here

Phone 239-560-0726

Email BrokerJoe@Me.com  

 

Comment balloon 0 commentsJoe Kendall • January 27 2015 11:57AM
Why have Interest rates dropped in January 2015
share
3514 Malagrotta Circle. Cape Coral Florida 33909 The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream… more
Cape Coral Florida. South Florida Foreclosures.
share
Southwest Florida Gulf Access Waterfront Foreclosures! Awesome Opertunity 3 Bedroom, 2 bath Pool Home with over 4, 000 sq ft. under aic and 6, 400 total under trust! Email BrokerJoe@me. com for more informatiom. #capecoral #fortmyers #naples… more
Cape Coral Florida, Homes, Condos * JoeSellsCapeCoralHomes. com
share
more
Cape Coral Florida 33914 * JoeSellsCapeCoralHomes. com
share
more
Joe Kendall Broker Associate, Right Choice Realty. Years of Experience
share
From the desk of Joe Kendall "Broker Joe " Broker Associate, Right Choice Realty. Direct line 239-560-0726 Specializing in Waterfront, Gulf Access, Luxury, New Construction Home Valuations Free Home Valuations * Joe's Home… more
Cape Coral Florida Boaters Realtor.
share
Welcome to this "Direct Gulf Access Pool Home" within minutes to Gulf of Mexico! This video was produced by Joe Kendall Broker Associate with Right Choice Realty. Call Joe today at 239-560-0726 for more information on this… more
Cape Coral Florida* Joe Kendall Sells Awesome Homes
share
As the new owners of this wonderful pool home, you'll feel like you're arriving to a TROPICAL PARADISE everyday! Located across the street from MULTI MILLION DOLLAR HOMES, this quality built pool home by Powell construction is simply… more
Thinking About Selling Your Home? Joe Kendall, Shore Line Realty
share
Welcome to Sunny Southwest Florida! Are you thinking about Selling your Home, Condo, Investment Property or Vacant land Coming up and agreeing on the current market value together is the easy part! But just as important is Who will know… more
Cape Coral Florida* Joe Kendall Sells Cape Coral Waterfront Homes
share
Fort Myers * Cape Coral * Pine Island *Bonita Springs * Sanibel Island * Lehigh Acres * Port Charlotte. Specializing in Waterfront, Gulf Access, Luxury, New Construction Home Valuations Free Home Valuations *My Home Buyers… more
Joe Kendall "Broker Joe" Personal & Professional…
share
Ask for Joe Kendall "Broker Joe " Broker Associate, Right Choice Realty. Direct line 239-560-0726 Fort Myers * Cape Coral * Pine Island *Bonita Springs * Sanibel Island * Lehigh Acres * Port Charlotte. Specializing in Waterfront,… more
Thinking about Selling Your Home? What Questions You Should Ask!
share
Thinking about selling your home? These 3 questions need to be answered (1) How much is my home worth? (2) What is… more
Cape Coral Florida * Luxury Gulf Access Pool Home *Amazing! $394, 900
share
more
How much is your home worth in Lehigh Acres?
share
more
How Much is Your Home Worth Today? JoeSellsCapeCoralHomes. com
share
more
Cape Coral Florida Waterfront Specialist
share
Cape Coral Florida Waterfront Expert. The deep water boaters Realtor! more
South Florida Luxury Home * Compare to Miami * Naples Asking $573, 000
share
View this tour in a new window. more
Cape Coral Florida * Luxury Gulf Access Pool Home
share
View this tour in a new window. Virtual Tours in Lee County and SW FL more
Selling Your Home FSBO? Do You Understand the Disclosure Laws?
share
more
Cape Coral Florida * Top Ranked Realtor * Referral * Relocation Agent
share
Many key components go into a successful home purchase and closing. The experience behind you can save you thousands of dollars In maintaining and insuring your home after the sale. It is critical you have a good Mortgage… more
Cape Coral * Fort Myers * Florida Real Estate Market May 2014
share
May 2014 Homes Sold Faster and For More Money! more