The Chief Economist for the National Association of Realtors sees this as a positive sign. “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market,” he said. These historically low rates continue to be the driving force behind the market. Such rates have given buyer’s the opportunity to purchase a home, in place of renting. The low rates have also openened the door for many home owner’s to refinance and save a significant amount of money on their monthly payments.
Although a lot people are taking advantage of the low rates, there are still many potential buyer’s out there that are taking them for granted. More experienced home owner’s have jumped at the opportunity to refinance because they have seen the other side of the spectrum and know how much a 1% rate decrease can save them.
On a $300,000 purchase with 10% down payment, and rate of 5.5%… your monthly payment is $1,533. At current rate of 4.5% your payment is $1,368… difference of $165/month. Savings for the year = $1,980. Savings over the life of the loan (30 years) = $59,400!!