Mortgage interest rates dip to lowest levels thus far

The credit crunch has made it tough for people to get home loans, but those who do manage to qualify could be getting lower interest rates.

Valley mortgage broker Dean Wegner said home buyers with good credit could be looking at the lowest rates this year -- 5.75 to 6 percent.

Interest rates have dropped by one-quarter to one-half of a percent in the past two weeks, a drop that usually takes six months, Wegner said.

The rate drops were due mainly to the government takeover of mortgage giants Freddie Mac and Fannie Mae. Wegner believes rates will go even lower, although he said everything depends on the federal government right now.

``It's very hard to say, but assuming that you have good credit, you could be in the mid 5s to the low 6s," he said, referring to interest rates somewhere around 5.5 to 6 percent.

``I think if you ask anybody in the real estate or mortgage or homebuilding industry, we all are real pleased with the way things are going right now," Wegner said. ``Basically, what it means is you can get a lot more house for a lot less money."

Lower interest rates mean ``more people are going to engage in real estate, and the buyer pool will increase and hopefully buy more of the inventory that's up there," Wegner said. ``Then we can see a rebound in home prices and home prices go back up where they should be."