Mortgage rates continue to fall

Residents of small communities are often willing to make sacrifices for the solace and greenery that rural life has to offer. While we, in Wahkiakum County, do not have immediate access to big-box giants or department stores when it comes to mortgage rates, it seems that we can do just as well locally as those in the urban centers of the state.

The average rate for the 30-year fixed mortgage recently fell to a record low for a fourth straight week. Mortgage buyer Freddie Mac said last Thursday that the rate on the 30-year loan dipped to 3.78 percent, the lowest since long-term mortgages began in the 1950s.

The average rate on a 15-year fixed mortgage, a popular option for refinancing, held steady at 3.04, matching the record low hit last week.

“Many of our borrowers are choosing to buy their rate down,” says Liz Gray-Weekley, banking center manager with Bank of America, Cathlamet. “By paying one point, customers can get below 3 percent on a 15-year fixed rate mortgage.”

The average rate on the 30-year loan has been below 4 percent since early December. Lower rates are a key reason the housing industry is flashing signs of a recovery five years after the bubble burst.

“Our mortgage department is seeing some purchases,” said Penny Paulsen, manager of the Cathlamet branch of the Bank of the Pacific.

In April, national sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.

“There are a lot of homes on the market right now,” Paulsen noted, “but our customers are taking advantage of the rates with home equity lines of credit. It’s a great time for home improvement projects.”

As home sales remain well below healthy levels, economists say it could be years before the market is fully healed.

The chief executive officer of the Bank of the Pacific summed up the mortgage situation in his May 2012 newsletter, “For those that need to borrow, there has not been a better time in the past 50 years in view of the present attractive interest rates. For savers, I’m afraid yields will be disappointing.”