The Mortgage Bankers Assn. (MBAA) reported last week the average interest rate on new 30-year fixed-rate loans nationwide was 4.97%, nearing the lowest level in decades. And on Thursday, Freddie Mac reported that the average fixed rate on a 15-year home loan had dropped to 4.46%, the lowest level on record.

 Not surprisingly, loan applications jumped 13% last week and are up 50% from late June. Aside from the holy grail rumor of 4.5% last summer, 5% seems to be the magic number that really spurs mortgage activity. Most of the activity has been for refis, while applications for new homes are growing as well, according to the MBAA

             
Most 30-year fixed-rate mortgages wind up in the pools the Fed buys and presently buys 80% of these securities as they are created. Economists estimate that rates are two-tenths to one-half of a percentage point lower than they would be otherwise, according to the Mortgage Bankers Assn. The Fed also said it would stop buying mortgage bonds at the end of March, the mortgage bankers group is projecting that 30-year fixed rates will be back at 6% by the end of 2010.

This  Week’s Real Estate Insight:
A Real Estate Perfect Storm is brewing, low interest rates, falling prices, and the tax credit have created the greatest affordability in years for home buying, but  act fast, the low rates will not last forever.

For the past eight years, The Apeiron Institute has held its annual Sustainable Living Festival in Coventry. The Institute’s goal is to make Rhode Island the nation’s first sustainable state, and they are a great resource for people looking to make their homes more energy efficient.  On September 26^th, they are bringing the festival to Providence to bring sustainable living to a whole new audience. Yesterday I spoke with Brad Hyson about what to expect at the festival. Dozens of workshops on sustainable living will be featured at the festival on a variety of topics including:

• Insulation Throwdown: an overview of different types of insulation and the pros & cons of each including installation techniques, material characteristics, budget costing, etc.
• Windows: Myths & Realities of New & Replacement vs. Storms: American Institute of Architects Reality of claims about new and/or replacement windows vs. storm windows. Hear the pros & cons of both with example energy efficiency and cost benefit analysis.
• LEED for Homes: RI Green Building Council LEED provides building owners and operators a concise framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.
• Green Building Tour of Gordon Avenue Business Incubator see what The South Providence Development Corporation has done to transform a vacant and decaying industrial building into a vibrant, environmentally sensitive business incubator. 

This Week’s Real Estate Insight:

The festival will take place primarily in Burnside Park in Kennedy Plaza, with workshops and select activities taking place throughout downtown; check out http://www.apeiron.org/ for a detailed schedule.