Interest rates are down again?

I remember telling people last year that rates wouldn't get below 5% again and yet here we are! Freddie Mac has a mortgage survey they publish every week and the west coast average rate is 4.5%. Go figure! And 5 year arms are in the  mid 3% range. Distressed homes - bank owned or short sales- continue to hold prices down so that, combined with the low rates, is making homes affordable for those with income and good credit. FHA is still allowing 3.5% down buyers so we are having first time buyers get homes in the city for $250,000-350,000 for  $8,750-$12,250 down. This small down payment may go up in the fall. Plus there will definitely be a change in the jumbo loan market as we lose the $567,000 conventional conforming limit in King County. Stay tuned!