Mortgage interest rates dipped to record lows last week, according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was 3.53 percent with an average 0.7 point, down from 3.56 percent the week before. Last year at this time, the average was 4.52 percent.
Freddie Mac chief economist Frank Nothaft said the low rates are helping to stir the housing market. “New construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes,” he said. In fact, home builder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."
Ed Mulderrig, owner of Mulderrig Builders in Southampton, says builders are ready to increase the waning supply of new homes on Long Island, as well. “There has been no construction for pretty much the last two years,” he says. “They [builders] started anticipating this last fall. They started buying land, getting permits and starting to build, especially out in the Hamptons.”
For the 15-year fixed-rate home loan, a popular refinancing option, the average rate was 2.83 percent with an average 0.6 point, down from the week before when it averaged 2.86 percent. A year ago, the average rate was 3.66 percent.
The low rates are contributing to the reduced inventory of homes on the Long Island market by making refinancing more attractive than selling, Mulderrig says. “The lower interest rates are definitely helping. People are refinancing, people who are holding onto their homes rather than putting their homes on the market. They figure the market is coming back and they don’t have to sell now. They’ll get more equity by staying.”