Financial Crisis Has Impact on Interest Rates and Real Estate Purchases

This week saw the U.S. financial crisis spread internationally. With all the volatility and uncertainty in the worlds markets, what has been the effect on interest rates and home purchases?

This week we have seen mortgage rates falling. Good news for consumers and businesses if they are able to get the loans. We continue to suffer a liquidity crisis around the world which has constrained lending.

Bankrate.com says of this week's interest rate activity: "The benchmark 30-year fixed-rate mortgage fell 22 basis points, to 6.19 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.4 discount and origination points. One year ago, the mortgage index was 6.5 percent; four weeks ago, it was 6.15 percent... For much of this year, mortgage rates have been extremely volatile. Earlier this spring, it was not uncommon to hear stories of mortgage shoppers who received great quotes, only to discover the rates were no longer available a couple of hours later.

"The National Association of REALTORS® is reporting research that points to an increase in pending home sales in August and an increase in home loan applications.

Our opinion: Buyers are reacting positively to the low interest rates in combination with the lower home prices that exist in most U.S. markets. The Denver Metro market is also reflecting these same nationwide trends.

See our website http://www.coloradoprorealestate.com/ .