The 30 year rate rose again this week rising from 4.92 to 5.00. Now in the last two weeks 30 year mortgage rates have risen from 4.87 to 5.00. Most of the other major mortgage products rose as well. The 15 year rate rose from 4.37 to 4.43. Both the 5 year arm rising from 4.38 to 4.40 and the 1 year arm was the only product to fall moving from 4.60 to 4.54.

While this is not a huge jump the question is are we seeing the tip of the iceberg with rising rates? The expectation has been that rates would rise as the economy improves. While the economy is by no means doing well it seems to be improving from what we have seen in the last year. Additionally, the government has lowered its volume of buying mortgage backed securities. This has helped mortgage rates to rise in the last two weeks and led to speculation of further rises. Below are rates for the last few weeks.

Oct 22, 2009
30-yr 5.00 15-yr 4.43 5-yr ARM 4.40 1-yr ARM 4.54

Oct 15, 2009
30-yr 4.92 15-yr 4.37 5-yr ARM 4.38 1-yr ARM 4.60

Oct 08, 2009
30-yr 4.87 15-yr 4.33 5-yr ARM 4.35 1-yr ARM 4.53

Oct 01, 2009
30-yr 4.94 15-yr 4.36 5-yr ARM 4.42 1-yr ARM 4.49

Sep 24, 2009
30-yr 5.04 15-yr 4.46 5-yr ARM 4.51 1-yr ARM 4.52

Mar 26, 2009
30-yr 4.85 15-yr 4.58 5-yr ARM 4.96 1-yr ARM 4.85

In spite of the increases rates are still relatively low. They are lower than at any point before January 2009 and lower than they were just last month. In addition to looking at rates we also like to see mortgage payments. Using our mortgage calculator we translated rates from October 22, October 8 and March 26 into a mortgage payment for a 200k loan.

Oct 22
30-yr $1073.64
15-yr $1522.84
5-yr ARM $1001.52
1-yr ARM $1018.12

Oct 08
30-yr $1057.8
15-yr $1512.66
5-yr ARM $995.62
1-yr ARM $1016.93

Mar 26
30-yr $1055.38
15-yr $1538.17
5-yr ARM $1068.75
1-yr ARM $1055.38

As we can see again there is not a huge difference. Compared to 6 months ago a mortgage payment is only 1.73 percent higher ($18.26 more a month).

So what is going to happen moving forward? The fear of rates hitting 12 percent has probably lessoned. Basically if the economy quickly recovered the speculation was that inflation could spiral out of control. Since the economic recovery seems to be a somewhat slow process the expectation is that mortgage rates and inflation will rise but it's doubtful they will move above 10 percent.

That said if one is looking at buying its best to lock in rates now considering that rates are rising and the expectation is that they will probably be higher a month from now.


Ki has lived and worked in Austin, Texas for over 10 years. He has a comprehensive understanding of Austin Tx real estate. His site provides graphs of historical mortgage interest rates along with a free mortgage calculator.

Although we are not seeing too much movement it looks like mortgage rates are starting to trend upward. It's interesting to note that the stock market had its strongest July in several years. Once the economy has a full recovery there are some predictions that inflation will spike and mortgage rates will hit double digits. We are a ways from that but its interesting none the less to see rates slowly moving up and the economy slowly moves into recovery mode. All four of the major mortgage products moved up this week. The 30 year mortgage went from 5.20 to 5.25; the 15 year fixed went from 4.68 to 4.69. The 5 and 1 year arm went from 4.74 to 4.75 and 4.77 to 4.80 respectively. Below are rates from the last few weeks and from January 15, 2009 (6 months ago).

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jul 02, 2009
30-yr 5.32 15-yr 4.77 5-yr ARM 4.88 1-yr ARM 4.94

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

In addition to looking at rates it's always nice to translate them into actual mortgage payments. We used a mortgage calculator to translate a 200k loan into a mortgage payment based on current rates. We also did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Jul 30
30-yr $1104.4
15-yr $1549.47
5-yr ARM $1043.29
1-yr ARM $1049.33

Jul 16
30-yr $1090.82
15-yr $1543.3
5-yr ARM $1052.96
1-yr ARM $1044.5

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

So while payments are higher (assuming one got a 30 year mortgage) they are not that much higher. Compared to 6 months ago a mortgage payment (on a 200k loan) would be $35.65 more a month or 3.33 percent higher. Enough for a fee extra coffee's a month but nothing substantial. But if rates spike up to 10 percent (as some predict) the payment would be 1755.14 which would be a 58.92 percent increase.

So what is our advice? As has been true for the last year I would avoid the arms like the plague. Although rates are up over the last few months historically speaking rates are still very low. There are very few cases where it makes sense to get an arm and risk refinancing in a few years at potentially a much higher rate. And if rates go down substantially (which is pretty unlikely) one can always refinance at the lower rate.

Also in the same vein if one is considering getting a mortgage in the next month or so I would suggest looking in early if one can do so without extra fees. Although rates could go either way there is a more of a risk of them moving up than down over the next month.


Ki writes frequently about mortgage rates. In addition to providing information about Austin Tx real estate his site provides a mortgage widget and a free mortgage calculator.

Mortgage rates continue to fall this week. The 30 year rate fell from 5.32 to 5.20. While this is not lower than the rates we saw a few months ago this is lower than any recorded rate before the start of 2009. The 15 year rate fell as well dropping from 4.69 to 4.63. In the last 5 weeks rates have fallen steadily each week going from 5.59 to 5.14. Below are rates from the last 5 weeks and rates from December 31, 2009 (6 months ago).

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

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

Dec 31, 2008
30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85

So the question remains after rising a few months ago why are rates suddenly falling. Part of it can be attributed to the negative economic news that has been coming out. While the economy is not necessarily getting worse the recovery seems to be moving slower than first thought. The slow recovery has put the breaks (for now) on inflation fears and has probably helped to push down interest rates as well. This is of course good news for the real estate market. The longer rates stay low the better the prospects for the real estate market to get rid of some of the excess inventory that has built up over the last few years.

In addition to rates we like to look at mortgage payments. Using our free mortgage calculator we looked at mortgage payments based on today's rates for a 200k mortgage.

Jul 16
30-yr $1090.82
15-yr $1543.3
5-yr ARM $1052.96
1-yr ARM $1044.5

We also did the same calculation on rates from 5 weeks ago (when rates first started to fall) and rates from the beginning of the year.

Jun 11
30-yr $1146.89
15-yr $1587.84
5-yr ARM $1094.51
1-yr ARM $1078.53

Dec 31
30-yr $1085.89
15-yr $1563.93
5-yr ARM $1144.37
1-yr ARM $1055.38

As we can see the drop in rates over the last few weeks is rather significant. A mortgage payment would be 4.88% less today than it was 5 weeks ago. For a 200k it would be $56.07 cheaper a month.

So what is going to happen in the future? It's hard to tell and I will be the first to admin I was pleasantly caught off guard by the recent drop in rates. While its hard to know what is going to happen in the next few weeks over the next 6 months I would expect rates to rise significantly as the economy starts to recover. Over the next few weeks I would expect there is more of a risk of rates rising than falling simply because rates are incredibly low now.


Ki works as an agent in the Austin market and enjoys spending his free time in the hill country. His site provides information on mortgage rates along with a free mortgage calculator. It also provides extensive information on Austin Tx real estate.

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.

So for the previous two weeks we saw sizable gains in mortgage rates. Between May 28th and June 11th 30 year mortgage rates jumped from 4.91 to 5.59. This week we saw rates drop down to 5.38. Although we are still above what we were at two weeks ago it's nice to see mortgage rates moving back down. The other major mortgage products all went down as well. The 15 year dropped from 5.06 to 4.89. The 5 and 1 year arms dropped from 5.17 to 4.97 (5 year arm) and 5.04 to 4.95 (1 year arm). Below are rates for the 4 major mortgage products since May 21st.

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

May 28, 2009
30-yr 4.91 15-yr 4.53 5-yr ARM 4.82 1-yr ARM 4.69

May 21, 2009
30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

Dec 18, 2008
30-yr 5.19 15-yr 4.92 5-yr ARM 5.60 1-yr ARM 4.94

So why are mortgage rates dropping? Basically for the last few weeks the economy has been improving and consequently we have seen mortgage rates increasing. In addition to that the government held a few bond auctions that went poorly which also provided upward pressure on mortgage rates. In the last week we have seen some signs the economy might not be recovering as cleanly and quickly as first hoped which has the effect of pushing mortgage rates down.

In addition to mortgage rates it's always nice to look at actual mortgage payments. We took today's rates and used a mortgage calculator and turned them into mortgage payments for a 200k loan. We also did the same thing with rates from June 11th (last week) and rates from December 18th (6 months ago).

Jun 18
30-yr $1120.56
15-yr $1570.15
5-yr ARM $1069.97
1-yr ARM $1067.53

Jun 11
30-yr $1146.89
15-yr $1587.84
5-yr ARM $1094.51
1-yr ARM $1078.53

Dec 18
30-yr $1096.98
15-yr $1573.26
5-yr ARM $1148.15
1-yr ARM $1066.32

As we can see payments based on 30 year mortgage rates the monthly payment on a 200k loans is about $26 dollars lower than they were last week.

So what is our advice? First of all I would still recommend 30 year mortgages. While rates on 5 and 1 year arms are lower I still expect rates to be much higher in 1 year and 5 years from now. So basically it's not worth the risk of having to refinance in a few years. Although rates are higher than they were a few weeks ago they are still near historical lows.

As always it's hard to predict what is going to happen moving forward. I would expect volatility in rates over the next month as we figure out whether the economy is one the road to recovery. Once the economy recovers we expect rates to increase rapidly. The government borrowed 50 cents of every dollar it spent this year. That mountain of debt should lead to higher interest rates.

Ki works as realtor in Austin Texas. His site is filled with information about Austin Texas real estate. It also provides information on mortgage rates along with a free mortgage calculator.

Last week mortgage rates moved up rapidly, moving up from 4.91 to 5.29. This week mortgage rates again jumped up .3 points going from 5.29 to 5.59. On May 21st rates were sitting at 4.82 which was a 40 year low. Now just a few weeks later rates are at 5.59. This is the highest we have seen rates since November 26, 2008. Unlike last week this week all the other major mortgage products went up as well. The 15 year rate jumped from 4.79 to 5.06. The 5 year arm moved from 4.85 to 5.17 and the 1 year arm moved from 4.81 to 5.04.

So what caused the sudden spike in mortgage rates? Basically the government had a few recent auctions of government debt that went poorly. With less interest in government debt, t-bills and mortgage rates have started to increase.

Below are rates for the major mortgage products for the last few weeks.

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

May 28, 2009
30-yr 4.91 15-yr 4.53 5-yr ARM 4.82 1-yr ARM 4.69

May 21, 2009
30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

May 14, 2009
30-yr 4.86 15-yr 4.52 5-yr ARM 4.82 1-yr ARM 4.71

Dec 11, 2008
30-yr 5.47 15-yr 5.20 5-yr ARM 5.82 1-yr ARM 5.09

In addition to rates we like to look at mortgage payments. Using a mortgage calculator we took rates from this week and translated them into a mortgage payment for a 200k loan. We also did the same thing with rates from June 4th, May 28th and from December 11, 2008 (6 months ago)

Jun 11
30-yr $1146.89
15-yr $1587.84
5-yr ARM $1094.51
1-yr ARM $1078.53

Jun 04
30-yr $1109.36
15-yr $1559.79
5-yr ARM $1055.38
1-yr ARM $1050.53

May 28
30-yr $1062.66
15-yr $1533.05
5-yr ARM $1051.74
1-yr ARM $1036.07

Dec 11
30-yr $1131.81
15-yr $1602.5
5-yr ARM $1176.05
1-yr ARM $1084.67

So as we can see mortgage payments have jumped drastically. Compared to 2 weeks ago the mortgage for a 200k loan has increased by $84.23 or 7.3 percent.

One point is that although rates have jumped rapidly historically speaking rates are still very low.

So what do we expect moving forward? There is some speculation that rates will fall after the recent rise. I am not sure if this will happen or not there are some powerful forces moving mortgage rates. And regardless of what happens in the next few weeks with the massive government borrowing its expected that in 6 months rates will be significantly higher than what we are seeing today.

So what is our advice to people looking for a home? First of all I would lock in immediately. While rates might go down there is a significant chance will continue to rise. If rates fall you can always relock at the lower rate. Additionally, I would avoid arms. Although the difference between 30 year rates and arm's has increased I would expect rates to be much higher in a year.


Ki lives in Austin Texas. His website provides information on Austin Texas real estate. It also provides a mortgage widget and a free mortgage calculator.

Mortgage Rates spiked up this week. The 30 year rate jumped from 4.91 to 5.29. This is the highest we have seen mortgage rates all year. Last week mortgage rates moved from 4.82 to 4.91 last week. What is interesting is that in two weeks mortgage rates have moved from near all time lows (the all time low was 4.78) to the highest point of the year. The 15 year rate moved up from 4.53 to 4.79. We did not see as much movement in the arms. The 5 year arm rose from 4.82 to 4.85 and the 1 year arm moved from 4.69 to 4.81.

Two weeks ago 30 year rates and 1 and 5 year arms were all hovering around 4.8 making the arms somewhat pointless. There is no reason to get an ARM when one can get a 30 year fixed mortgage for the same rate. With the sudden rise in the 30 year rate the arms have become relevant again. I still think the 30 year mortgage product is preferable over the arms even at current rates. Although 30 year mortgage rates have risen the expectation is that they will continue to rise for the rest of the year. Below are rates for the last few weeks as well as from 6 months ago.

Jun 04, 2009
30-yr 5.29 15-yr 4.79 5-yr ARM 4.85 1-yr ARM 4.81

May 28, 2009
30-yr 4.91 15-yr 4.53 5-yr ARM 4.82 1-yr ARM 4.69

May 21, 2009
30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

May 14, 2009
30-yr 4.86 15-yr 4.52 5-yr ARM 4.82 1-yr ARM 4.71

May 07, 2009
30-yr 4.84 15-yr 4.51 5-yr ARM 4.90 1-yr ARM 4.78

Dec 04, 2008
30-yr 5.53 15-yr 5.33 5-yr ARM 5.77 1-yr ARM 5.02

In addition to mortgage rates we also like to look at mortgage payments. Using our mortgage calculator we translated today's mortgage rates into a monthly payment on a 200k loan. We did the same thing with rates from last week and rates from December 4, 2008 (6 months ago).

Jun 04
30-yr $1109.36
15-yr $1559.79
5-yr ARM $1055.38
1-yr ARM $1050.53

May 28
30-yr $1062.66
15-yr $1533.05
5-yr ARM $1051.74
1-yr ARM $1036.07

Dec 04
30-yr $1139.34
15-yr $1616.18
5-yr ARM $1169.68
1-yr ARM $1076.08

Usually there is not too much difference from week to week. That is not true this week. The payment on a 200k loan has risen 46.7 or about 4.4 percent. Payments are down 2.63 percent from what they would have been 6 months ago.

So what is our advice to people looking for a home? Unfortunately I think mortgage rates will continue to rise so it's probably best to lock in rates now. Second although arms are a viable option I would still take the 30 year rate over the 1 or 5 year arm. There are some expectations this recent rise is just the tip of the iceberg and we could see rates above 12 percent before this is over with.


Ki maintains a website about Austin Texas. His site also provides information on mortgage rates along with a free mortgage calculator.

Mortgage rates fell for the second week in a row. 30 year rates fell to a 40 year low to start the year dropping down to 4.96 on January 15th. After that rates rose up to 5.25. Now rates have fallen back to almost reach their previous lows. In fact this is the lowest rates have been in 40 year with the exception of the first two weeks of 2009. Below are rates for the last few weeks.

Feb 19, 2009
30-yr 5.04 15-yr 4.68 5-yr ARM 5.04 1-yr ARM 4.80

Feb 12, 2009
30-yr 5.16 15-yr 4.81 5-yr ARM 5.23 1-yr ARM 4.94

Feb 05, 2009
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

Jan 29, 2009
30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2009
30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

The 5 year Arm fell quite a bit this week and is now equal to the 30 year rate (This is the first time since November 20, 2008 that the 5 year arm is not above the 30 year arm). But it's still a pointless rate because why get a 5 year arm when you could get the same rate on a 30 year fixed mortgage. The same can be said of the 1 year arm since it does not offer that much savings over the 30 year rate.

The 15 year rate fell this week and is now also sitting at the lowest point in 40 years with the exception of the first two weeks of 2009. I always like to translate mortgage rates into actual mortgage payments. Below are mortgage payments for a 200k loan based on today's rates and rates from a week and a month ago.

Feb 19
30-yr 1078.53
15-yr 1548.44
5-yr ARM 1078.53
1-yr ARM 1049.33

Feb 12
30-yr 1093.28
15-yr 1561.86
5-yr ARM 1101.93
1-yr ARM 1066.32

Jan 22
30-yr 1088.35
15-yr 1560.82
5-yr ARM 1103.16
1-yr ARM 1063.88

Messing around with our mortgage calculator I found something kind of interesting that illustrates the importance of mortgage rates on payments. If you got a 200k loan with a 30 year mortgage in 1995 the rate would have been around 9 percent and the mortgage payment would have been around $1625. Assuming you never refinanced you would pay off the loan in 2025.

Now if you got a 200k mortgage today you could get a 15 year mortgage with a 4.68 percent rate and pay only $1548.44. In addition, you would actually pay off the mortgage a year earlier in 2024.

So what is my advice in the current market? First I would avoid the 5 and 1 year arm. The rates are relatively high and it makes more sense to lock in with a long term rate when rates are at historic lows. Second I would look into getting a mortgage before spending too much time looking for a house. Basically although rates are low lenders are still pretty picky these days about finances. In addition, if there is anything weird with your credit score finding out early will allow you to have time to fix any outstanding issues.

So as far as the mortgage market what do we expect to happen over the next few weeks? Basically with the stock market hitting 6 year lows recently and hovering near 12 year lows and the bailout getting passed it seems that the market is going to be pretty volatile over the next few weeks. So I could see rates going up or down by possibly as much as half a point. If you have found a house you like it might make sense to lock in now but watch rates and try to relock if they fall significantly over the next week or two.

Ki maintains a website with information about Austin Tx real estate. It also has a free mortgage calculator along with updated graphs on mortgage interest rates.

Mortgage rates came down a little this week. We are still not back down to the levels we saw two weeks ago. 30 year rates fell from 5.25 to 5.16. This is a little higher than the 5.10 we saw two weeks ago and .2 points higher than the 4.96 we saw 4 weeks ago. But to put this all in perspective if we neglect the last month 5.16 is still one of the lowest rates we have seen in over 40 years.

One point of confusion is that when looking at average rates people relate it to a rate a friend or colleague got a few weeks ago. For instance if you had a friend that got a rate of 4.3 last week and see rates are at 5.16 you might think you really missed the boat. But 4.3 is lower than anything that has been officially published. Often these rates are down to paying more points to drive down the interest rate or they might be due to a special deal for instance a University offering professors a special rate. All this is to say if you have a friend that got a rate below 4.5 a few weeks ago don't fret you should be able to a similar rate today that is only slightly higher. Below are rates for the last few weeks. The rates on January 15th mark the lowest rates we have seen in 40 years and easily the lowest rates of the year.

Feb 12, 2009
30-yr 5.16 15-yr 4.81 5-yr ARM 5.23 1-yr ARM 4.94

Feb 05, 2009
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

Jan 29, 2009
30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2009
30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Besides the drop in the 30 year rate we also saw a similar drop with the 15 year fixed rate. Both the 5 year arm and the 1 arm stayed mostly steady. Looking at rates is interesting but we like to translate it into mortgage payments. We took today's rates and translated them into a mortgage payment on a 200k loan. We did the same thing with rates from a week ago. We also looked at what the mortgage payment would be based on rates from January 15th (the lowest rates so far).

Feb 12
30-yr 1093.28
15-yr 1561.86
5-yr ARM 1101.93
1-yr ARM 1066.32

Feb 05
30-yr 1104.4
15-yr 1573.26
5-yr ARM 1105.64
1-yr ARM 1063.88

Jan 15
30-yr 1068.75
15-yr 1545.36
5-yr ARM 1104.4
1-yr ARM 1060.23

Looking at the 30 year rate we notice that while today's payment would be higher than what one would have paid based on January 15th rates its not that much higher. If we look back a few months ago to October 30th when rates were at 6.46 the potential payment on a 200k mortgage would be $1258.87. All this is to say that rates have come up recently but all in all they are still low to what we have seen over the last several years.


Ki writes regularly about mortgage rates and the mortgage industry. His site has a search for homes in the Austin MLS along with mortgage calculator widget.

After falling for the last 2 months 30 year mortgage rates jumped up this week. The 30 year mortgage went from 5.10 to 5.25. This is the highest we have seen December 11, 2008. The 15 year mortgage moved up as well from 4.80 to 4.92. Below are rates for the last few weeks.

Feb 05, 2008
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

Jan 29, 2008
30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2008
30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

Jan 15, 2008
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Jan 08, 2008
30-yr 5.01 15-yr 4.62 5-yr ARM 5.49 1-yr ARM 4.95

The 5 year arm and the 1 year arm for the most part held steady. The 5 year arm still remains a pointless mortgage option since it is above the 30 year rate. The 1 year rate is moving back to almost being a viable option. While the difference between the 1 year arm and the 30 year fixed is still not great enough to see many people choosing the 1 year arm, if the 30 year rate rises more next week I could see the 1 year arm starting to see more activity. In addition to looking at rates we wanted to also look at actual mortgage payments. We took today's rates and determined what the mortgage payment would be on a 200k mortgage. We also did the same thing with rates from a week ago and rates from January 15th when rates hit their lowest point so far.

Feb 05
30-yr 1104.4
15-yr 1573.26
5-yr ARM 1105.64
1-yr ARM 1063.88

Jan 29
30-yr 1085.89
15-yr 1560.82
5-yr ARM 1106.88
1-yr ARM 1061.45

Jan 15
30-yr 1068.75
15-yr 1545.36
5-yr ARM 1104.4
1-yr ARM 1060.23

Compared to January 15th ones potential mortgage payment has risen about 3.2 percent. This is a decent rise for this short of a period of time.

So if you were planning on purchasing and didn't lock in 3 weeks ago did you miss the boat? I would say yes and no. The rates 3 weeks ago were at 30 year lows and they have risen quite a bit since then. But looking over the last several decades today's rates are still very very low.

It's hard to know what is going to happen moving forward. Without direct government involvement I don't see rates falling back to what we saw a few weeks ago. So that begs the question, are we ever going to see the proposed 4.5 government sponsored loan become a reality? The difficulty of passing the recent economic stimulus package makes it look like passing additional programs might be tough as well. And if it does pass there are probably going to be some strings attached. Currently I would peg the chance of it passing at around 50%. But if the housing market weakens this month I would think the prospects of a 4.5% government mortgage would rise substantially.


Ki writes regularly about mortgage rates. His site has free mortgage calculator along with general information about Austin Tx real estate.

The Austin Friends of Traditional Music promise to erase our winter duldrums with this year's Mid-Winter Festival. The festival includes an impressive performance roster as well as workshops in Irish fiddle, Appalachian clogging, bluegrass vocal harmonies, jug band music, and more.

The festival kicks off with Mary Hattersly and the Blazing Bows, a children's fiddling group that applies the Suzuki method to playing Texas fiddle music. Next on the docket are the 1001 Nights Orchestra, a Middle Eastern group that plays songs ranging from Southwest Asia and the Caucuses in the East to the western shores of the Mediterranean, as well as original compositions. The group is led by Kamran Hooshmand, who brings the sounds of his native Iran with the oud, guitar, rabab, santour, and saz.

Rumbullion will be performing, a group that combines original and traditional instrumental music in a swinging, French jazz style. Jeff Moore and Heather Gilmer will be performing traditional Irish music, with their tunes ranging from jigs and reels to dance music from the Sliabh Luachra regions of Ireland.

Several bluegrass performers are included in the line-up. Brennan Leigh plays guitar and sings bluegrass, gospel, and Americana. The Electric Mountain Rotten Apple Gang bill themselves as a Texas thrash grass combo, inspired by the traditional sounds of bluegrass and mountain string bands, delivering a high energy stage act. Ranch Road 12, formed in April of last year and featuring Alan Munde on the banjo, Janice Rogers on the bass and Elliott Rogers on guitar, will play hill country bluegrass.

Rattletree Marimba play Zimbabwean style marimba, a high energy dance and trance music that they guarantee will get you on your feet. And the Big Jug band will finish the night with their eclectic American jugband music.

Food service will be available, and includes offerings for both the vegetarians and the carnivores among us, as well as drinks. Proceeds from food sales support the Austin Friends of Traditional Music (AFTM).

The festival takes places on Sunday, February 15th at the Dougherty Arts Center on Barton Springs Road, with performance and workshops running from noon to 9:30. Admission to the winter fest is $15 for regular admission, $12 for members of AFTM. Discounts exist for seniors and students. Children over 12 pay $5 and children under 12 are free. Admission not only gives you access to the great performances, but gives you entry to the wide range of workshops on offer. If the economic downturn has you pinching pennies, you can be admitted for free by volunteering to help with the festival, including setting up the auction, helping empty garbage, working as a stage hand or working in food service.

The seed for AFTM was planted in the autumn of 1974, when a group of musicians came together in an Austin living room to plan a convention for traditional music pickers and singers. By November, they held their first event, which was a huge success. Currently, AFTM presents two yearly music festivals, with an emphasis on central Texas music community and featuring both local and not-so-local talent. Check their website for more information about pre-registration or about signing up as a volunteer with the Mid-Winter Fest.



Ki serves the Austin area with his website. Interested parties can search for Austin Texas real estate. His site has a free mortgage calculator and statistics and information on Austin real estate.

Mortgage rates for the most part held steady this week. The 30 year rate dropped from 5.12 to 5.10. Rates are still at historic lows. The rates for the last month have all been below anything we have seen in the last 40 years since we started tracking weekly mortgage rates. The 15 year rate held steady at 4.8. The 5 year arm rose from 5.24 to 5.27 and the 1 year arm dropped from 4.92 to 4.90. What the numbers below don't reflect is that rates mid week were a little higher midweek. But by the end of the week they had fallen. Below are rates for the last few weeks.

Jan 29, 2008
30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2008
30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

Jan 15, 2008
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Jan 08, 2008
30-yr 5.01 15-yr 4.62 5-yr ARM 5.49 1-yr ARM 4.95

Dec 31, 2008
30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85

If you are planning on putting 20% down the 5 year arm and the 1 year arm are pretty pointless. The 5 year arm is above the 30 year fixed rate. The 1 year arm is below the 30 year fixed but doesn't really offer enough savings to be worth the tradeoff of forgoing locking in at historic lows. We have seen a trend recently where on some properties banks are allowing borrowers to get 10 percent down for a 5 or 1 year arm but are requiring 20 percent for a 30 year loan. I am not sure why banks are favoring arm's since that is what got them into this mess. Ok so in addition to looking at rates lets look at mortgage payments. We looked at a mortgage payment based on today's rates for a 200k loan. We also did the same thing looking at rates from 2 weeks ago (which was all time low point for the 30 year fixed rate mortgage). We also looked at rates from 2 months ago.

Jan 29
30-yr 1085.89
15-yr 1560.82
5-yr ARM 1106.88
1-yr ARM 1061.45

Jan 15
30-yr 1068.75
15-yr 1545.36
5-yr ARM 1104.4
1-yr ARM 1060.23

November 20th
30-yr $1204.24
15-yr $1658.67
5-yr ARM $1182.43
1-yr ARM $1109.36

As we can see although a mortgage payment would have been a little less 2 weeks ago all in all rates and mortgage payments have not changed that much. But we are still seeing substantial savings from 2 months ago.

So what is our advice. It should be pretty obvious but with rates at all time lows the time to refinance is now. In addition, if you are currently thinking of getting a mortgage I would lock in an interest rate sooner rather than later.

In general there is still more of a risk of rates going up over the next month than down. Rates simply don't have that much room to fall. So most likely we should see rates hold even or rise over the next month. In addition, there is a risk that rates could rise rapidly over the next 6 months if the economy improves.

Ki writes regularly about mortgage rates. His site provides a search of the Austin MLS along with a free mortgage calculator

So rates fell slightly this week. This marks the 10th week in a row rates have fallen. This is also the 3rd week where the the 30 year mortgage rate (the most popular mortgage product) has hit new 30 year lows. The 30 year rate fell from 5.14 to 5.10. The 5 year arm rose from 5.49 to 5.57. As long as the 5 year rate is higher than the 30 year arm it doesnt really matter if it rises or falls because no one is using it. The 1 year arm fell from 4.95 to 4.85 and the 15 year arm fell from 4.91 to 4.83. Even though these rates fell more than the 30 year rate these mortgage rates are still pretty pointless. As long as the 30 year rate is this low it really makes more sense to lock into this rate for the long term.


Dec 31, 2008
30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85

Dec 24, 2008
30-yr 5.14 15-yr 4.91 5-yr ARM 5.49 1-yr ARM 4.95

Dec 18, 2008
30-yr 5.19 15-yr 4.92 5-yr ARM 5.60 1-yr ARM 4.94

Dec 11, 2008
30-yr 5.47 15-yr 5.20 5-yr ARM 5.82 1-yr ARM 5.09

Dec 04, 2008
30-yr 5.53 15-yr 5.33 5-yr ARM 5.77 1-yr ARM 5.02

So lets take rates and translate them into a mortgage payment. We ran the current rates on a 200k mortgage. Then we looked at rates from last week and from a October 30th when rates first started their historic fall.

Dec 31
30-yr 1085.89
15-yr 1563.93
5-yr ARM 1144.37
1-yr ARM 1055.38

Dec 24
30-yr 1090.82
15-yr 1572.22
5-yr ARM 1134.32
1-yr ARM 1067.53

October 30th
30-yr $1258.87
15-yr $1708.31
5-yr ARM $1245.77
1-yr ARM $1120.56

So the savings from last week are not that impressive. But compared to October 30th we are seeing much lower payments. Here are the savings for the different rates compared to October 30th.

Rate Dollar Amount Saved
30 yr $172.98
15-yr $144.38
5-yr ARM $101.4
1-yr ARM $65.18

Rate Percent Drop in Mortgage Payment
30 yr 13.74%
15-yr 8.45%
5-yr ARM 8.14%
1-yr ARM 5.82%

The most interesting number to me is 13.74% the percent drop for the 30 year rate in the last 2 months. That is pretty significant.

So what is going to happen moving forward. I actually think rates are headed higher over the next two years. They might decrease a little more over the next few months. The government has a pending plan to offer mortgage rates at 4.5 percent for home buyers. But the way things are headed it would be interesting if mortgage rates fell below 4.5 percent making the governments plan somewhat pointless.

But once the economy recovers most signs point toward massive inflation. Why? The Fed has been pouring billions into the economy to stop the economy from falling apart further. This would usually cause inflation except for the fact that the economy is so sluggish. But once the economy recovers the massive amounts of cash the government has pushed into the economy should cause high levels of inflation. This will most likely lead to double digit interest rates. Some thing rates will get up to 15%. So our currently historically low interest rates might be followed by historically high interest rates.


Ki writes regularly about mortgage rates. His site has a search of the Austin MLS along with a free mortgage calculator.

Mortgage Rates fell again this week. This is the ninth week in a row were rates have fallen. Last week mortgage rates were already at 50 year lows. The 30 Year mortgage rate fell from 5.19 to 5.14. This is not a huge fall. The significant point this week is that they basically stayed down at historically low levels. Here are the lowest points mortgage rates have seen for the last 30 years. 1) December 2008 5.14 2) June 2003 5.23 3) March 2004 5.45 4) May 2003 5.48 Although rates are lower than they were in 2003 and 2004 the mortgage market today is trickier. In 2003 and 2004 virtually anyone could get a decent rate. Today banks are looking closely at credit scores. In addition banks have almost no interest in giving out loans to people wanting to purchase multifamily properties. Below are rates for the last few weeks. December 24, 2008 30-yr 5.14 15-yr 4.91 5-yr ARM 5.49 1-yr ARM 4.95 December 18, 2008 30-yr 5.19 15-yr 4.92 5-yr ARM 5.60 1-yr ARM 4.94 December 11, 2008 30-yr 5.47 15-yr 5.20 5-yr ARM 5.82 1-yr ARM 5.09 December 4, 2008 30-yr 5.53 15-yr 5.33 5-yr ARM 5.77 1-yr ARM 5.02 November 26, 2008 30-yr 5.97 15-yr 5.74 5-yr ARM 5.86 1-yr ARM 5.18 While the 30 year rate and the 15 year rates have fallen we have not seen nearly as much movement in the 5 and 1 year ARM. So in addition to mortgage rates it's interesting to look at what the actual payments would be on a loan. Using our free mortgage calculator we ran the numbers on today's rates for a 200k loan. We also ran the numbers for last weeks rates and rates from October 30th. The reason we choose October 30th was because that was when we began the 9 weeks of falling rates. December 24th 30-yr $1090.82 15-yr $1572.22 5-yr ARM $1134.32 1-yr ARM $1067.53 December 18th 30-yr $1096.98 15-yr $1573.26 5-yr ARM $1148.15 1-yr ARM $1066.32 October 30th 30-yr $1258.87 15-yr $1708.31 5-yr ARM $1245.77 1-yr ARM $1120.56 Compared to last week the payment for a 30 year loan only fell a few dollars going from 1096.98 to 1090.98. On the other hand if we look back to October 30th the payment has fallen from $1258.87 to $1090.82. This is a drop of about 13.4 percent. If we also consider that prices in most areas have fallen over the same period of time this is pretty substantial savings. There is still no reason to look at Arms. The 5 year ARM still has rates above the 30 year mortgage which makes this product basically pointless. The 1 Year Arm is lower than the 30 Year rate but it's basically pointless for 2 reasons. First the difference is pretty small this week it was only .19 points. Second since 30 year rates are historical lows the small savings hardly seem worth losing the chance to lock in at historical lows. So what is going to happen with rates moving forward? I think rates are going to hold even or fall a little more over the next month. After that expectations are that rates are going to increase slightly. Once the economy recovers the massive amounts of money the Fed have pushed into the economy should lead to inflation which could push mortgage rates up to 12 or 13 percent. All that is to say over the next few months we might see the lowest rates we are going to see for the next few decades.

The financial markets hit some choppy waters this week. With successive drops of 427 and 445 points the Dow ended down substantially for the week.

For some positive news this marks the third week in a row where mortgage rates went down. The wild swings we saw earlier in mortgage rates have for the time being ended. The last 3 weeks saw less movement in all four of the major mortgage products.

30 Year mortgage rates are down to 6.04 dropping from 6.14 last week. All the other main mortgage products saw drops as well. Compared to the 30 year fixed rate the 5 year arm dropped a little more (.11 points from 5.98 to 5.87) and the 15 year dropped a little less (.08 points dropping from 5.81 to 5.73). Below are mortgage rates for the four major products for the last few weeks.

November 20, 2008
30-yr 6.04 15-yr 5.73 5-yr ARM 5.87 1-yr ARM 5.29

November 13, 2008
30-yr 6.14 15-yr 5.81 5-yr ARM 5.98 1-yr ARM 5.33

November 6, 2008
30-yr 6.20 15-yr 5.88 5-yr ARM 6.19 1-yr ARM 5.25

October 30, 2008
30-yr 6.46 15-yr 6.19 5-yr ARM 6.36 1-yr ARM 5.38

October 23, 2008
30-yr 6.04 15-yr 5.72 5-yr ARM 6.06 1-yr ARM 5.23

Moving on lets translate mortgage rates into a the mortgage payments one would pay on a 200k loan. We translated today's rates as well as the rates from 3 weeks ago.

November 20th
30-yr $1204.24
15-yr $1658.67
5-yr ARM $1182.43
1-yr ARM $1109.36

October 30th
30-yr 1258.87
15-yr 1708.31
5-yr ARM 1245.77
1-yr ARM 1120.56

As we can see since October 30th the potential payment on a 30 year, 15 year and 5 year has come down quite a bit. The 1 year arm has remained relatively stable for the last few weeks. The 5 year rate is still probably the most unattractive mortgage product right now. Payments on the 5 year arm are pretty similar to the payments on a 30 year loan. Considering it's hard to know where rates will be in 5 year it's probably not worth to get a 5 year arm considering the small savings it currently offers.

The other thing we are seeing in the mortgage markets is that banks are still very reticent to give out loans. Zero down and no doc loans are pretty much dead. Because of the disappearance of no doc loans it has become harder for people that are self employed to get loans. Since so many potential borrowers have been pushed out of the market potential borrowers with 1031 jobs and money for down payments have very little competition for properties.

So what is going to happen moving forward. It's hard to know what is going to happen with the economy in general. Although mortgage rates have been relatively stable recently if Obama makes any huge initiates in the housing market it could push mortgage rates pretty far in one direction or another. I expect that 30 year mortgage rates will stay above 5.8 until the end of the year simply because I don't expect to see many major policy changes until Obama takes office.

Ki writes about trends with mortgage rates. His website provides a mortgage calculator widget and a tool that graphs mortgage interest rates

The Fed cut the fed funds rate at the end of October. The rate was dropped from 1.5% to 1%. This is the lowest the rate has been since 2003. Following the cut we saw drops in all the major mortgage products. The 30 year dropped from 6.46 to 6.2. The largest drop was in the 15 year mortgage which fell from 6.19 to 5.88 a drop of .31 points. 5 year arms and 1 years also fell .17 and .13 respectively. Below are mortgage rates for the last several weeks.

November 6, 2008
30-yr 6.20 15-yr 5.88 5-yr ARM 6.19 1-yr ARM 5.25

October 30, 2008
30-yr 6.46 15-yr 6.19 5-yr ARM 6.36 1-yr ARM 5.38

October 23, 2008
30-yr 6.04 15-yr 5.72 5-yr ARM 6.06 1-yr ARM 5.23

October 16, 2008
30-yr 6.46 15-yr 6.14 5-yr ARM 6.14 1-yr ARM 5.16

As we can see from the numbers rates have been moving back and forth over the last few weeks pushed around by different bits of economic news coming out. And this week of course by the recent cuts by the fed. Let's look at what a mortgage would be this week on a 200k loan based on current rates. We also looked at what the mortgage would be for a 200k loan based on last weeks rates.

November 6th
30-yr $1224.92
15-yr $1674.77
5-yr ARM $1223.64
1-yr ARM $1104.40

October 30th
30-yr 1258.87
15-yr 1708.31
5-yr ARM 1245.77
1-yr ARM 1120.56

So first off my advice would be to avoid the 5 year arm. Since the mortgage is so close to what you would be paying on a 30 year fixed mortgage their is almost no reason to consider a 5 year arm. I would also probably avoid a 1 year arm. With mortgage rates acting so wildly its pretty likely rates could be much higher a year from now. If you get a 30 year fixed and rates drop substantially you can also refinance at the new lower rate. If you get a 1 year arm and rates increase there is not much you can do but simply make higher payments.

So what is going to happen moving forward. I have heard some speculation that rates are going to increase this month. I don't know if rates will be higher a month from now but I think rates will continue to see the atypical large weekly fluctuations we have seen the last few weeks.

There has also been some speculation that the fed will raise rates if the market starts to improve. I don't think this is a foregone conclusion. If the economy starts to improve I don't think the government will move quickly to raise rates. Basically the financial crisis has been so severe that if we start to move beyond it politicians will be worried of raising rates too quickly will botch a potential recovery. Or if the recovery fails for other reasons they will be blamed anyway. Therefore I think priority number 1 over the next year will remain the real estate and mortgage markets and that translates to keeping the fed rate low. Of course keeping the fed rate low does not guarantee that mortgage rates will stay low.

Ki is a realtor in Austin Texas. He writes regularly about mortgage interest rates. His site offers free mortgage calculator html for webmasters and a widget that shows current mortgage rates

This marks the third week in a row that mortgage rates have moved in one direction or another by more than .4 points. This is highly unusual. For some perspective for the 12 weeks from March 20th to June 5 mortgage rates held steady between 5.85 and 6.09. At this point mortgage rates are highly highly volatile. Here are mortgage interest rates for the last 4 weeks.

October 30, 2008
30-yr 6.46 15-yr 6.19 5-yr ARM 6.36 1-yr ARM 5.38

October 23, 2008
30-yr 6.04 15-yr 5.72 5-yr ARM 6.06 1-yr ARM 5.23

October 16, 2008
30-yr 6.46 15-yr 6.14 5-yr ARM 6.14 1-yr ARM 5.16

October 9, 2008
30-yr 5.94 15-yr 5.63 5-yr ARM 5.90 1-yr ARM 5.15

October 2, 2008
30-yr 6.10 15-yr 5.78 5-yr ARM 6.00 1-yr ARM 5.12

30 Year rates have been a little more volatile than the 15 year fixed and 5 year arm products. The one mortgage product that stands out is the 1 Year ARM. It has for the most part been steadily rising over the last few weeks.

So what is going on with mortgage rates? Basically there are a number of strong forces pushing around mortgage rates like a wild hurricane. Over the last few weeks we have seen similar erratic swings with the stock market with both historic rises and drops happening several times in the last week. Add to the uncertainty in the economy with massive government bailout programs (the Fannie Mae takeover and the 700 billion bailout) we can begin to see that the erratic movement in mortgage rates is simply a reflection of a highly erratic time period in the general economy.

Ok let's look at what your payment would be on a 200k mortgage. Using our mortgage calculator we ran the numbers based on today's mortgage rates. We also ran the numbers based on mortgage rates from last week.

October 30th
30-yr 1258.87
15-yr 1708.31
5-yr ARM 1245.77
1-yr ARM 1120.56

October 23rd
30-yr 1204.24
15-yr 1657.60
5-yr ARM 1206.82
1-yr ARM 1101.93

It's hard to tell what rates are going to do moving forward. But it looks like rates will continue to remain volatile. What we are seeing is basically a tug of war between the government and the economy. The government is doing whatever it can to push down rates through takeovers, bailouts and lowering the fed rate. Negative factors that come up in the economy tend to push rates up because it causes banks to not want to lend out money. I think we will continue to see this tug of war for the next few weeks. Add a presidential election throw in for good measure and I expect to see mortgage rate volatility to continue. That said overall I expect mortgage rates to go down over the next month. The government shows no signs of letting up and I think they will win the tug of war in the long term.

What recommendations do I have for people looking for a loan? I hate recommending arms. If people are looking at the buying for a long term (single family home owners) I would advise to avoid arms. If investors are planning on being in a property for a short period of time and have the cash reserves to deal with random changes in mortgage payments the 1 year is attractive because the difference between 30 year and 1 year arms is greater than what we typically see.

Ki lives in Austin are writes about trends with mortgage rates. His site provides a free mortgage calculator and a graph of historical mortgage interest rates.

Most visitors to Austin notice the unusual streetlights strategically located throughout the city known as the moonlight towers, but most are not aware of the history of the towers. Probably the most well known of the moonlight towers is the one in Zilker Park which is used every year to represent a huge Christmas tree, when it is encircled with multi-colored lights and can be seen from miles away.

There are actually 17 moonlight towers in and around Austin, including the Zilker tower, and these lights have been in use since the late 1800s, when Austin purchased the lights from the city of Detroit. In 1894, 31 used mercury vapor lamps were installed throughout Austin, and at the time, these types of lights were used in many cities across the country, but Austin is the only city still using them today.

The lamps, which are perched atop wrought iron posts, give off a distinctive pinkish-yellow light, and the lamps illuminate a 3000 foot circle of ground. Even thought the lights appear to be one large lamp, they are actually made up of 6 carbon arc lamps, and the lamp poles are actually 165 feet triangular posts made of cast and wrought iron.

The 100 year anniversary of the moonlight towers was celebrated in Zilker Park in 1995, and some of those who attended the anniversary event still have the custom made shirts which were available for purchase at the event, with an original artist's rendition of the lamps on the front and back of the shirts, including the date of the commemoration of the lights. These shirts are considered collector's items now, and the lamps themselves are listed on the National Register of Historic Places.

Most of the moonlight towers are situated in or around the older residential neighborhoods which encircle the downtown area, such as Clarksville, Speedway, Travis Heights, and the Zilker Park neighborhoods, but some are actually located in the downtown area itself, such as the one that is located at Guadalupe Street and West 9th. During the time of the 100 year anniversary of the lights, all of them were taken down and restored one at a time and then replaced in their original location, and even though there were originally 31 lamps, there are now only 17 in operation.

Each moonlight tower is held up by a fifteen foot pedestal which is encircled with guy wires and a network of cables, and the lights are changed and maintained by the use of a ladder which is affixed to the towers. Each tower has a commemorative plaque as well, with a brief history of the lights engraved on the plaque. The lights have been in continuous operation for over 100 years, and during that time, the lights have only been turned off twice.

The first time they were turned off was in 1905 when the lights were unlit for week during a dispute between the members of the city council and the Water and Light Commission. The second time they were turned off was in 1973, when the national energy crisis required the city to turn them off to conserve energy.

The moonlight towers are another example of the uniqueness of Austin, as well as Austin's intention of preserving our heritage and honoring its historical significance. Many people travel to Austin to see the annual lighting of the Zilker Tree, which includes a yearly celebration of the Zilker Moonlight Tower, so be sure to visit Zilker during the holidays and check out the beautiful, tall, lighted tower, which is lit to resemble a tree, or drive through the downtown and surrounding neighborhoods and take a look for yourself at these legendary lights!

Escapeso Realty helps buyers and sellers in Austin Texas. Their site is filled with stats on the Austin Texas real estate market. Additionally their site has a free mortgage calculator and a search for Austin homes.

Mortgage interest rates moved down this week. 30 Year rates feel back below 6 dropping from 6.10 last week to 5.94. 15 Year rates all fell quite a bit going from 5.78 last week to 5.63 this week. Below are rates for the major mortgage products for the last few weeks.

October 9, 2008
30-yr 5.94 15-yr 5.63 5-yr ARM 5.90 1-yr ARM 5.15

October 2, 2008
30-yr 6.10 15-yr 5.78 5-yr ARM 6.00 1-yr ARM 5.12

September 25, 2008
30-yr 6.09 15-yr 5.77 5-yr ARM 6.02 1-yr ARM 5.16

September 18, 2008
30-yr 5.78 15-yr 5.35 5-yr ARM 5.67 1-yr ARM 5.03

One thing that stands out is Arms are looking less and less attractive. Arms are loans that start adjusting after a certain number of years. When Arms adjust upward and homeowners cannot make the new higher payments they frequently lead to foreclosure. It seems that banks are finally looking to make Arms less attractive. I have wondered why they didn't do this in the past. Looking at today's rates there is almost no reason to get a 5 year Arm over a 30 year fixed rate mortgage. Currently a 30 Year fixed rate mortgage is 5.94 and a 5 Year arm is 5.90. Considering the added stability of the 30 Year fixed rate mortgage the small difference in the interest rate hardly seems worth it. Let's look at what a mortgage would be using our free mortgage calculator for a 200k loan. We also ran the numbers for mortgage interest rates from last week and in the middle of the summer.

October 9th
30-yr $1191.39
15-yr $1186.27
5-yr ARM $1647.99
1-yr ARM $1092.05

October 2nd
30-yr $1211.98
15-yr $1664.03
5-yr ARM $1199.10
1-yr ARM $1088.35

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

So again looking at the rates it's pretty obvious the 5 year loan does not provide much of a benefit compared to a 5 year loan. If we look back to July 24th we can see that in general the difference between the 30 year fixed mortgage product and a 5 year arm is greater.

The other trend we have been seeing is the growing gap between owner occupy and investment loans. Since lenders are seeing more foreclosures with investment loans they have been charging a higher interest rate for investment loans. So while mortgage interest rates for owner occupy loans have fallen over the last month mortgage rates for investment loans have held steady. That said I think investment properties are pretty attractive right now in spite of higher interest rates. This is basically because we have seen prices falling more for investment properties and therefore making them a better bargain. The last question is what is going to happen with rates moving forward. I can't really say if they will go up or down but I expect rates to remain volatile as long as the rest of the financial markets remain volatile. Therefore, if you are looking at buying a property I would lock an interest rate early and monitor the rate afterward in case it drops and you can relock the interest rate.

Ki writes regularly about mortgage interest rates. His site has a tool that graphs mortgage interest rates. He also provides a free mortgage calculator and graphs of mortgage rate trends.

Mortgage Rates Widget Historical Mortgage Rates