Mortgage Rates hit Historic Low

Mortgage rates have dropped to a 50 year low this week. Locally, we have heard lenders lock in mortgage rates around the 4.75 percent mark for a 30-year, fixed rate mortgage. As recently as the summer of 2008, those rates were at or above 6 percent. On a $300,000 mortgage, the monthly savings is about $230 (comparing 6 percent to 4.75 percent).

This drop in rates is causing a flood of refinancing activity, with local lenders reporting a huge jump in the volume of calls they are receiving.

These rates may help some local borrowers control their costs as they look to refinance out of adjustable rate mortgages. And while mortgage lenders have returned to more stringent standards of loan approval, we are hearing lots of reports of successful refinances in the South Sound market.

But it isn't just refinancing owners cashing in, buyers are also taking advantage of these great rates. The combination of moderating home prices and these interest rates have more buyers venturing out to look for houses. The Mortgage Bankers Association's seasonally adjusted purchase price index rose 10.6 percent.