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You Can Use Falling Mortgage Rates Provide Opportunity
By
DAVE SIMANOFF
Published: Jan 29, 2004
TAMPA - When Jerry Couzens looks at today's historically
low mortgage rates, he doesn't see numbers. He sees more elbow room. Couzens,
a sales manager for Liberty National Life Insurance Co. in Tampa, shares a three-bedroom
Hyde Park apartment with wife Verndetta and his two stepchildren, 11 and 16. The
apartment seemed spacious before the marriage in November 2002, and now it's just
too cramped. ``I need more room,'' he said. Couzens is looking to buy a
bigger home, preferably one with four bedrooms and two bathrooms, in an established
neighborhood such as Seminole Heights. He said the low interest rate means he'll
be able to afford a larger or more expensive house than he could at higher rates,
or that he'll have lower mortgage payments that will mean more money in his pocket
for renovations, expansions or anything else. ``Do I like something that lowers
payments and increases my bottom line?'' he asked. ``Sure, absolutely.'' Interest
rates might not be as low as last summer, but buyers across the country still
are finding their dollar goes much farther today than it would several years ago.
Some economists predict that rates will stay low for at least the first part of
2004. Still, there are signs that mortgage rates may rise sooner than later.
On Wednesday, the Federal Reserve dropped two little words - considerable period
- from its usual description of how long it can keep interest rates low. To some
economists, the missing verbiage might indicate a rise in the Fed's target rate
this year, which would affect mortgage rates. Treasury markets fell Wednesday
on news of the omitted words. Mortgage giant Freddie Mac said last week that
the average rate on a 30-year fixed mortgage was 5.64 percent, the lowest in six
months, and down from 5.66 percent the previous week. The average has gone up
and down since June, when it was at 5.21 percent, a 40-year low. Freddie Mac is
expected to report new weekly averages today. Couzens sat down Monday afternoon
with Rich Reynolds, a mortgage consultant for HomeBanc Mortgage Corp. in Tampa,
for an initial meeting to discuss what kinds of mortgage products are available.
Reynolds said he's seen steady demand from people looking to buy a home, but a
modest drop-off in the number of people who want to refinance an existing home.
``All the folks who thought they had missed the boat, they are the ones who
are calling now,'' he said. Craig Beggins, president of Tampa-based Century
21 Beggins Enterprises, said he senses many customers are eager to buy a new house
now because they're worried about rising mortgage rates. ``You don't know what
the future holds, but you know now that rates are the lowest they've been in decades,''
he said. Beggins said the slow rise in interest rates since last summer was
a wake-up call. The Mortgage Bankers Association said last week that it expects
rates for 30-year conventional mortgages to rise to about 6.3 percent by the end
of 2004, and 7.1 percent by the end of 2005. Couzens said low interest rates
aren't driving his decision to buy a new house, but are a welcome bonus. He's
not daunted at the thought of rising rates. ``I'm not really concerned about
this,'' he said. ``I've got to buy a home anyway.'' Information from
The Associated Press was used in this report. Reporter Dave Simanoff can be reached
at (813) 259-7762. Continue with: | 
