Europe, starting with Greece, is in the midst of a financial crisis and that is actually good for U.S. mortgage rates.  Like many others had done, I predicted that rates would rise this year and for a short time they did.  Then along came Greece’s problems.  Spain, Portugal and other countries are not far behind as they have taken on so very much debt.

According to Bankrate.com, the average for a 30 year fixed loan is at the lowest in 25 years.  That rage is reported to be at 4.87%.  Jumbo mortgage rates have dropped as well.  The rate for a 30 year fixed jumbo is at an amazing 4.5%.

The reason for this is panic in the European investment markets.  Investors are pulling money and buying what they consider to be relatively safe U.S. Treasury Bills.  The high demand pushes rates down and that affects all sorts of consumer interest rates including mortgages. 

Although the wave of home purchases that is cresting due to the end of the tax credit, perhaps these historically low mortgage interest rates will help bring on another wave.  If nothing else, it may bring a wave of refinances.  I feel badly for the folks in Eorupe, but this has brought a benefit to Americans.

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