The recent debt crisis in Greece has wreaked havoc on the markets, and many are concerned that the problems in Greece could spread to other European countries including Spain and Portugal. This has resulted in a flight to safety, as investors look to reduce risk by finding more stable investments.
One of the few positives of this crisis has been a reduction in mortgage rates (which will make it cheaper to buy Charlotte homes for sale). Nervous investors are moving to less risky investments such as securities issued by the US government. Because mortgage rates are closely correlated to government bonds, mortgage rates have declined.
What does this mean for homeowners? Basically, homeowners can expect lower mortgage rates in the short term (at least until the European instability continues).
Recent data from Freddie Mac and Bankrate indicate that mortgage rates are no longer in a holding pattern, and have fallen to their lowest level in six weeks. Freddie Mac’s Primary Mortgage Market Survey (PMMS), showed that 30-year fixed-rate mortgages were down from 5.06 percent last week (still above last year’s rate from this time last year of 4.84). Bankrate reported rates declined to 5.12 percent.
Is this low rate environment sustainable? According to the Bankrate survey, the chances are about 50/50 that rates will stay where they are. Half of the mortgage experts in the Bankrate survey predict rates will increase while the other half felt that rates would either decline or remain unchanged.
Eventually rates will increase, but the timeline is still undetermined. The fact that Europe is unable to pay its mortgages translates into lower mortgage rates. But investors are anxious, and looking for safe investments like the greenback. For homebuyers looking for a Charlotte Real Estate Investment, that’s a good thing.