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Interest rates are at an all time low, as reported in the Asbury Park Press (www.app.com) today January 15, 2009.  This should encourage New Jersey Shore vacation home buyers to take advantage of these low rates and decling prices.  The window of opportunity may be small. No one knows for sure.      

The average U.S. rate on a 30-year fixed mortgage fell below 5 percent this week for the first time on record as a government program to buy mortgage-backed bonds lowered borrowing costs.

The fixed rate dropped to 4.96 percent from 5.01 percent a week earlier, Freddie Mac said in a report today. That’s the lowest in data that goes back to 1971, according to the McLean, Va.-based mortgage buyer.

The Federal Reserve last week started buying $500 billion of mortgage-backed securities to boost prices for mortgage bonds in the hopes that lenders will reduce the interest rates they charge. No matter how low the rates go, it won’t help homeowners who have lost their jobs or seen the value of their property tumble, said Brian Bethune, chief U.S. financial economist at IHS Global Insight Inc. in Lexington, Massachusetts.

“The Fed is arm twisting to get rates lower, but we’re 2 million jobs fewer than we were in July and we’ve seen home prices continue to fall, so we’re in a bigger hole,” Bethune said.

The government last week reported employers cut 524,000 workers from payrolls in December, bringing the total number of job losses for 2008 to 2.6 million. Job losses this year may total 3 million, according to a Global Insight estimate.

Sales of single-family homes in November dropped 7.6 percent from the prior month, the most in two decades, according to the Chicago-based National Association of Realtors. Resale prices fell 13 percent from a year earlier, the biggest drop since the Great Depression of the 1930s, the trade group said.

Mortgage applications in the U.S. rose last week to the highest level in more than five years, led by a surge in refinancing as interest rates fell to a record low. The Mortgage Bankers Association’s index gained 16 percent to 1,324.8 for the week ended Jan. 9, the highest level since July 2003. The group’s refinancing gauge jumped 26 percent and the purchase measure fell 14 percent.

To search MLS for the New Jersey Shore Real Estate go to:

www.asburyparklife.com/jerseyshorerealestate.html 

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