It may have seemed as if the springtime rise in the rates St. Cloud home loan originators were quoting was overdue for a pause, and that's what local applicants found last week. The rate dips weren't gigantic, but they pointed in the right direction. Over the weekend, Yahoo! finance's "Moneywise" column was able to headline, "Homeownership just got 5% cheaper as mortgage rates fall off a cliff."

To applicants whose recent memories include interest rates that began with a "3," that cliff may seem to be a low one—but the NARs' senior economist was correct in asserting that purchasing a home was 5% more affordable at week's end than at its beginning. At week's end, Freddie Mac's calculation for the average 30-year mortgage rate was 5.3%—down from 5.7%. Another ray of sunlight was the slight loosening of what has been a painfully sparse supply of U.S. homes for sale.

For soon-to-be home loan applicants combing the St. Cloud listings to work out what their monthly loan payments would amount to, any retreat was good news. Even more so was the current situation as viewed by those with a broader perspective, especially in light of one often-overlooked historical fact: today's home loan deals remain atypically advantageous.

That statement is visually presented in a chart displaying Freddie Mac's official historical data. The simple line graph begins at 1971 and shows a more or less steady rise from above 7% to the infamous heights of 1983, which peaked at an unsustainable 18+%—the crushing record. From there began a decade-long rate drop until it touched the overall average rate—which is what today's buyers (especially younger ones) may find eye-opening.

It hovers over the dotted horizontal line depicting the 50-year average—a label that reads,

"Average since 1971: 7.77%."

Freddie Mac isn't prone to dramatics, so there's no "!" after the label—but it deserves one. Put another way, last week's national average home loan rates were a full 2% below what the average American homebuyer has signed up for through the years. It's no exaggeration to say that today's qualified buyers are being offered historically advantageous borrowing propositions. It might partially explain why some observers won't be surprised if the market begins an uptick before the year ends—especially if the rates hold.

Do give me a call if you are contemplating taking advantage of the St. Cloud market this summer.    

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