Jul. 4, 2009 - Mortgage Rates Fall Again
Mortgage Rates fell this week with the 30 year rate dropping from 5.42 to 5.32. They have fallen .27 points from their recent high of 5.59 reached on June 11, 2009. Rates are still up from the all time low of 4.78 they reached on April 30, 2009. Except for the 1 year arm the other major rates dropped as well. The 15 year fixed rate dropped from 4.87 to 4.77 and the 5 year arm dropped from 4.99 to 4.88. The one year arm rose slightly from 4.93 to 4.94. Below are rates for the last few weeks.
Jul 02, 2009
30-yr 5.32 15-yr 4.77 5-yr ARM 4.88 1-yr ARM 4.94
Jun 25, 2009
30-yr 5.42 15-yr 4.87 5-yr ARM 4.99 1-yr ARM 4.93
Jun 18, 2009
30-yr 5.38 15-yr 4.89 5-yr ARM 4.97 1-yr ARM 4.95
Jun 11, 2009
30-yr 5.59 15-yr 5.06 5-yr ARM 5.17 1-yr ARM 5.04
Jun 04, 2009
30-yr 5.29 15-yr 4.79 5-yr ARM 4.85 1-yr ARM 4.81
Dec 31, 2008
30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85
In addition to rates we also like to analyze mortgage payments. Using our free mortgage calculator we took today's mortgage rates and translated them into a mortgage payment for a 200k loan. We did the same thing with rates from June 25, 2009 and December 31, 2008 (6 months ago).
Jul 02
30-yr $1113.09
15-yr $1557.72
5-yr ARM $1059.02
1-yr ARM $1066.32
Jun 25
30-yr $1125.55
15-yr $1568.07
5-yr ARM $1072.42
1-yr ARM $1065.1
Dec 31
30-yr $1085.89
15-yr $1563.93
5-yr ARM $1144.37
1-yr ARM $1055.38
While a potential mortgage payment is down from last week it is up $27.20 (2.5 percent) from 6 months ago.
Although rates are low it's important to note that loans are not freely available. Banks are still extremely strict on the properties and individuals that will receive loans. For instance loans for non warrantable condos (where 50% or more of the units are rented instead of owner occupied) have pretty much disappeared. The credit scores thresholds needed for a loan have increased as well. So although mortgage rates are near historic lows the lending industry continues to be the biggest negative factor dragging on the real estate market.
So what do we expect to see moving forward? There is a huge upward pressure on mortgage rates because of the amount of borrowing the US government has engaged in over the last year. So while it's hard to know what is going to happen over the next month we should see higher mortgage rates in the next year. Since rates are going to be higher this is a good reason to avoid the 1 year arm since by the time the arm expires rates could be over 8 percent.
More importantly is whether the lending industry will ease up on some of the current mortgage restrictions. While when the market finally improves it's assumed some lending restrictions will disappear but it's doubtful that lending restrictions will ease up before then.
Ki lives in Austin Texas. His site provides a mortgage widget along with a free mortgage calculator. It also has a search for Austin Tx real estate.
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