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Rates fall back to record low

Mortgage rates fell this week, setting or matching modern record lows.

The benchmark 30-year fixed-rate mortgage fell 9 basis points this week, to 4.42 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.37 discount and origination points. One year ago, the mortgage index was 5.35 percent; four weeks ago, it was 4.45 percent.

At 4.42 percent, the 30-year fixed matched a record low in the 25-year history of Bankrate's weekly survey. It equaled a record low set two weeks ago. Rates haven't been lower since March 1953, according to the National Bureau of Economic Research's statistics on FHA-insured loans.

The benchmark 15-year fixed-rate mortgage fell 9 basis points, to 3.81 percent. The benchmark 5/1 adjustable-rate mortgage fell 10 basis points, to 3.57 percent, and the 30-year, fixed-rate jumbo fell 6 basis points, to 5.04 percent. All of those are record lows in Bankrate's weekly survey.

High drama

This week was full of suspense, with the midterm elections Tuesday and the Fed's pivotal announcement on Wednesday afternoon. The uncertainty is expected to continue through Friday morning, when the Labor Department will release the employment report for October.

The election results, the Fed's stimulus policy and the jobs report all had the potential to affect mortgage rates in unpredictable ways, both short-term and long-term. It brings up the question of what a prospective borrower should do when faced with a series of influential events. Is it better to lock a mortgage rate in case rates rise, or is it preferable to float, in case rates fall?

"Lock," says Jim Svinth, executive vice president of capital markets for mortgage lender loanDepot.com. "What I always say is lock today. At least get that in. If we see another big move, with rates coming down a quarter or half percent, you can refinance again. It's not unheard of."

Blame game

Bankers blame government-controlled Fannie Mae and Freddie Mac, which impose extraordinarily stringent underwriting standards on mortgage lenders.

One part of the government -- the Fed -- is trying to encourage homeowners to refinance, while another part of the government -- the Federal Housing Finance Agency, which oversees Fannie and Freddie -- is making it difficult for homeowners to refi.

Discover what the national media
headlines won't tell you:

The housing market in
Louisiana is strong!

If you're thinking about building or buying a home in Louisiana, now is a great time to do it. The investment you make today can help you build long-term wealth.

You can benefit from knowing the facts about the housing market and tax incentives for homebuyers, so please take a few moments to review the educational and resource information contained in this website. This information is provided as a public service by the Louisiana Home Builders Association.

Economists forecast that Louisiana will show growth and stability, while most other states show losses during this national recession period.

According to the Louisiana Economic Outlook, the United States will experience a "relatively shallow national recession lasting about one year," and during that time Louisiana will have near level job growth in 2009 and a gain of 28,400 jobs in 2010.

(Report submitted in October 2008 by LSU Economist Loren Scott, James A. Richardson, M. Dek Terrell of the LSU E.J. Ourso College of Business)

Louisiana's Real Estate Market
Posts 6% Growth

According to the report, Louisiana has avoided problems in the housing crisis because the state's banking industry did not get into the subprime loans that helped stall bank-to-bank lending. Also, housing prices have not been artificially elevated in the state, thereby creating a housing bubble that burst in states like California, Florida and Nevada.

Investing in real estate is historically one of the safest financial investments.

Even in down markets, over the long term, house prices still appreciate more than the stock market. On average, the value of a home nearly doubles every 10 years. In fact, over the past three decades, home values have increased an average of more than 6% per year.*

(* Figures obtained from the National Association of Realtors)

Interest rates are low, selections are great, and tax credits are available.

Because of the cool down in the national real estate market, interest rates have been lowered to encourage activity. Louisiana's banks and lenders have available cash to loan to homebuyers with good credit. At the same time, qualified first-time buyers can receive a tax credit of up to $8,000 for a limited time.


Now IS a good time to build or buy a new home in Louisiana!