The guest post below is by Melinda Carter, Guest blogger. I take no responsibility for the accuracy of the information. If you have further questions, I can recommend a local lender. ~Damion Flynn, Broker
No market in the United States has really avoided the issues that have affected many real estate scenes throughout the country. Some areas have managed to take small, steady hits, staying afloat and looking to thrive in the near future.
One potential sign of the future is the dipping mortgage rates throughout the nation, as well as the Southeast. Even though this type of statistic may seem trivial, these decreases could have a long term impact on the buyer’s market in areas such as the Gulf Coast and other southeast cities.
In the Biloxi real estate market, a 30 year fixed rate mortgage is currently at 4.078 percent. With these mortgage rates dipping into the sub four levels, they are tapping record lows in many areas of the country. The levels throughout the country are lower than they have been in a mere 60 years, but what does this mean for buyers and sellers?
Mortgage rates going so low have had a twofold effect. It has certainly played up a benefit for potential buyers but it hasn’t done too much to drive people into the buying market and away from the rental scene. One positive in this area of the country is the fact that record low mortgage rates are combining with continually rising rental rates. This has an effect on those potential first time buyers who are on the fence, deciding whether to keep renting an apartment or look into purchasing their first home.
A good example of this peaking interest is in major cities such as Biloxi and New Orleans. In Biloxi, the average rental rate is between $650 and $750 these days. With the 30 year fixed rate mortgage at 4.078 percent in the area, prospective buyers may choose to stay away from rising rates. New Orleans apartments are sitting between $750 and $900, as 30 year fixed rate mortgages in the area sit at 4.312 percent.
Mortgage rates alone aren’t necessarily set to drive prospective buyers into the market any time soon, but they could play a role as a factor for those interested in purchasing. In the end, most families and potential buyers will make their decisions based on a set of important factors during their own process. Rather than a focus on recent trends throughout the southeast or Gulf Coast, a purchase is more likely to take place today because a house fits a need for that individual buyer. Although they won’t have a huge effect on consumer confidence, the low mortgage rates can have an effect as a small factor for those who are already interested in buying somewhat, especially in areas such as the southeast where rental rates continue to rise.
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