The Federal Reserve has been raising short-term rates at a steady clip for almost a year now. As a result, it has become more expensive to take out adjustable-rate mortgages and home equity lines of credit. Normally, long-term interest rates go up when short-term interest rates go up. Not this time, and for reasons even Alan Greenspan can’t explain fully. The rates on 10-year Treasurys (the benchmark for long-term, fixed-rate mortgages) have been drifting slightly down or moving sideways for the better part of a year. Because of this, ARMs are getting costlier while fixed-rate mortgages have been getting less expensive. Currently, rates on one-year ARMs average 4.36%, just .99 percentage points below the 5.35% rate on 30-year fixed-rate mortgages. If you’re in the market for real estate in Las Vegas, these are important financial issues to consider carefully with your lender. The cost of money is very inexpensive by historical standards and the value added to Las Vegas homes because of this has been significant.

This entry was posted by Michelle Sterling on Tuesday, March 8th, 2005 at 10:29 am and is filed under Business & The Economy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.