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Metro Atlanta Mortgage Rates Continue to Slide
Metro Atlanta mortgage rates continue to fall. Nationwide, for the fifth week in a row, 30-year fixed mortgage rates dropped and now are at an average 4.12 percent, according to a national survey. That was down from the previous week's average of 4.14 percent.
Despite an announcement by the Federal Reserve that it would begin to taper its stimulus, which brought the expectation that mortgage rates would increase gradually, rates have remained near all-time lows. The Fed has announced four declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.
According to Bankrate, a number of factors have played into rates remaining low, including slow overall growth in the U.S. economy. Without strong growth in investments, mortgage rates tend to stay low because they are related to yields on long-term government debt.
Warmer weather has yet to boost home buying as it normally does. Rising prices and higher interest rates beginning in mid-2013 have made homes less affordable for would-be buyers. At the same time, a limited supply of homes is available to buy. New construction has focused increasingly on rental apartments, instead of single-family homes.
Fed Chair Janet Yellen has told Congress that the economy is improving but noted that the job market remains "far from satisfactory" and that inflation is still below the Fed's target rate. She said she expects the Fed's near-zero target for short-term rates to remain appropriate for a "considerable time" after the bond purchases end.
Stay plugged in here with our website and we'll keep you up to date on the latest Metro Atlanta mortgage rates, and news that affects those rates.
Pending Home Sales Rise in April
The National Association of Realtors said this past week that its seasonally adjusted pending home sales index rose 0.4 percent to 97.8 last month. The index remains 9.2 percent below its level a year ago.
More people signed contracts to purchase homes in April than the prior month. But the pace of buying is still weaker than last year, as higher prices and relatively tight supplies have limited sales.
Pending sales are a barometer of future purchases. A one to two month lag usually exists between a signed contract and a completed sale. The index indicates that home buying has barely increased in May.
Would-be buyers have gotten some help in recent weeks from falling mortgage rates that we just talked about in our first story. Average rates for 30-year, fixed mortgages declined for the fifth straight week to 4.12 percent.
Still, rates remain above their lows of 3.51 percent a year ago. The rising rates in the second half of 2013 and higher home prices appear to have reduced the pool of potential homebuyers.
The Realtors group said last week that sales rose 1.3 percent in April from March to a seasonally adjusted annual rate of 4.65 million. Purchases of homes over the past 12 months have dropped 6.8 percent.
5 Best Things to Buy in June
Shifting gears a bit away from "all things related to Metro Atlanta real estate", we thought we'd bring you a little buying advice in something besides Metro Atlanta real estate, and give you some tips on some other things you might find a good deal on in June.
Tools: Father's Day is June 15th, and retailers are discounting prices on tools and other home improvement equipment. Even if you're not buying tools for Dad, you may want to assess your own supply, since tools rarely go on sale. Check out coupons and newspaper ads for home improvement stores to compare prices.
Designer Clothes: If you're in the market for some hip summer clothes, June is an excellent month to hit the sales racks. All the big fashion houses are making way for their fall collection, so now is a great time to scoop up those latest trends you've been eyeing.
Gym Memberships and Equipment: Anyone working on their beach body, or those simply trying to maintain a healthy one, will benefit from slashed prices on gym memberships, fitness apparel and workout equipment in June. With new year's resolutions long forgotten and more people getting outdoors to take advantage of the nice weather, there's less of a demand for indoor gym equipment and gym memberships. Lack of demand equals a decrease in prices.
Grills and Grilling Supplies: If you delayed buying a new grill for the summer, June and July are the best months for deals on grills. Also shop for grilling supplies, including utensils and grill baskets.
Dishes: Due in large part to June being such a popular month for weddings, dishware companies offer discounts on their products to try to win spots on registries. That's good news for everyone in need of new place settings, soon-to-be-married or not. Expect discounts to start around 25 percent off and to go as high as half off, or more.
See you next month for another issue of our Metro Atlanta real estate newsletter!