Good News for Home Buyers: Mortgage Rates Near 50-Year Low

Mortgage rates have taken a significant dip, nearing the lowest levels in 50 years. Couple that news with April’s 7.6% rise in home sales, and the end result is an opportune time to buy a house.

Due to Europe’s recent financial troubles, investors have been channeling more money into a safer option – U.S. Treasury Bonds. Rates on these bonds are often used to attract investors. However, because investors have been buying bonds without needing extra enticement, these rates have begun to fall. Closely connected with mortgage rates, falling bond rates have triggered falling mortgage rates.

Many homebuyers — anticipating rising mortgage rates and the tax credit expiration — have had strong incentives to purchase homes over the past few months. Thus, it was no surprise that pre-owned home sales rose 7.6% in April. Economists are hopeful that the recent month-to-month home sales increases will continue as worried overseas investors keep  U.S. mortgage rates lower than expected.

Taking advantage of today’s unforeseen opportunity could save homebuyers a significant amount of money, since minor mortgage rate dips can drastically reduce monthly fees. ABC news explains, “If you take a home valued at $400,000 with a 30-year fixed-rate mortgage, a one-point decline in your mortgage rate can cut about $200 off what you pay ever month.”

For more information, visit abcnews.com or watch the video below.