Freddie Mac reports a jump in the 30-year fixed mortgage rate to a three-month high of 6.24% during the week ended Feb. 28 from 6.04% last week, marking the third consecutive weekly increase. Interest on 15-year fixed-rate mortgages climbed to 5.72% from 5.64% over the same period. Meanwhile, the five-year adjustable mortgage rate edged up to 5.43% from 5.37%; and the one-year ARM shot up to 5.11% from 4.98%.
These mortgage rate increases are a direct result of rising inflation numbers, oil that hit $102 per barrel, and concerns over a national recession. There is no reason to hit the panic button just yet, remember, it was just 1 month ago when mortgage rates hit a 3 year low. We certainly see rates falling as fast as they have risen just as we enter into the Spring buying season. As I write this post, mortgage backed securities are seeing an inflow of millions and recession concerns are certainly easing as Bush’s economic relief delivery date grows nearer. We will still see sub 5% rates by Summer time and predict a MASSIVE refinance boom in a month or so.
We are nearing the perfect time for investors to make significant plays in the Nashville housing market. Sellers are getting nervous, financial institutions are stiffening, and Nashville area rents are rising at phenomenal rates.
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