Not even the lowest interest rates in decades could entice wary house-hunters last month. Homes sales in Whatcom County remain sluggish with pending sales about even from the same time last year but not all numbers were down.

Year to date closed residential sales increased 13%. Including condominiums closed sales were up nearly 17% year to date. Brokers applauded congressional approval of legislation to extend the tax credit deadline on contracts signed by the April 30 deadline. The deadline has been pushed out to September 30, 2010.

In general consumers seem to be stuck in uncertainty surrounding the world’s economic concerns, our lack of jobs and the rollercoaster of the stock market. They seem to be hunkering down despite the lowest interest rates in years.

Buyers were quite shy, as pending sales posted a 20.5% decrease to 205 from June of 2009. Many would-be June buyers already bought during the credit period. Sellers seemed to be more confident, so new listings increased 14.6% to 360 over last June.

In response, inventory levels increased 7% to 2,177 over last year, which predictably exerted downward pressure on prices. The June median sales price of $246,500 was a 7.9% decrease from last year.

Negotiations inched slightly back toward the seller by 0.5% to arrive at 92.9% of their original list price. Market time decreased 11.5% to 109 days; whilc months of supply decreased 9.0% to 12.4 months.

According to Freddie Mac’s Weekly Primary Mortgage Market Survey (PMMS), the average rate on a 30-year fixed rate loan came very close to hitting an all-time low again last week.

At the end of last week, the average rate was 4.94%. That is the lowest level since May 28, and it was awfully close to  the record low set on April 30, also of this year. To put that number into perspective, the average interest rate was 6.10% this time last year.

What This Means for Home Buyers
Since June, this rate has dropped by about 0.65% (from 5.59% in mid-June). To give a sense of what this size of a drop means for home buyers, someone with a $300,000 loan and an interest rate of 4.94% would save about $1,450 per year (versus a 5.59% interest rate), or about the cost of one mortgage payment.

What About Refinancing?
Hearing about low interest rates may make one consider refinancing an existing loan. But, before you do, remember there is more to think about than just the monthly savings. Lenders typically charge for the refinance, and that should be compared to any expected monthly savings.

If there’s a chance you’ll be moving in the near future, the costs may likely outweigh the savings. However, if you plan to stay long enough for the monthly savings to outweigh the upfront costs, then the refinance might be a smart move.

Average Rates Since 2005
The table below (from FreddieMac.com) shows how the average monthly interest rates have fluctuated since 2005.

Monthly Average Commitment Rate And Points On 30-Year Fixed-Rate Mortgages

It’s important to note that these rates are just averages. Actual rates are going to vary for each home borrower, as they are affected by the size of one’s down payment, type of loan taken out and the borrower’s credit score.

Fees and Points
Besides the interest rate, a borrower should keep an eye out for the fees and points a lender charges for the loan (displayed in the “Pts” column in the table above). Along with interest, those fees and points combine to make up the actual cost of the loan reflected in the Annual Percentage Rate (APR). According to the PMMS, the average fees and points charged on the 30-year-fixed rate loan has remained at 0.7 since October 2008.

More information on what mortgage rates have done historically can be found at FreddieMac.com/pmms.