Mortgage Rates Hold At All Time Historic Low
Last week the 30 year rate fell to an all time low of 4.57
. This week mortgage rates held at 4.57 so we are still sitting on all time historic lows. This is also the 4th week in a row where mortgage rates have either held steady or fallen. The expectation has been that rates were going to rise. Since the economic recovery has kind of sputtered their has been some downward pressure on mortgage rates. If the economy starts to recover we could expect rates to increase. In the meantime I would expect rates to hold steady or fall a little more. I would probably not hold out for lower rates though since there is a limited amount they could fall at this point. Its pretty unlikely rates will fall below 4.3.
Looking at the other major products, the 15 year dropped from 4.07 to 4.06. The 5 and 1 year arms rose from 3.75 to 3.85 (5 year arm) and 3.75 to 3.74 (1 year arm). Below are rates from the weeks from June 17, 2010 to July 15, 2010
Jul 15, 2010
30-fixed 4.57 15-fixed 4.06 5 ARM 3.85 1 ARM 3.74
Jul 08, 2010
30-fixed 4.57 15-fixed 4.07 5 ARM 3.75 1 ARM 3.75
Jul 01, 2010
30-fixed 4.58 15-fixed 4.04 5 ARM 3.79 1 ARM 3.80
Jun 24, 2010
30-fixed 4.69 15-fixed 4.13 5 ARM 3.84 1 ARM 3.77
Jun 17, 2010
30-fixed 4.75 15-fixed 4.20 5 ARM 3.89 1 ARM 3.82
Dec 31, 2009
30-fixed 5.14 15-fixed 4.54 5 ARM 4.44 1 ARM 4.33
So in addition to mortgage rates let's look at actual mortgage payments. We took today's rates and used a mortgage calculator to determine the mortgage payment on a 200k loan. We also did the same thing with rates from July, 01 2010 and rates from December, 31 2009
Jul 15
30-year $1021.7
15-year $1485.39
5-year ARM $937.61
1-year ARM $925.09
Jul 01
30-year $1022.89
15-year $1483.38
5-year ARM $930.77
1-year ARM $931.91
Dec 31
30-year $1090.82
15-year $1534.07
5-year ARM $1006.25
1-year ARM $993.26
Compared to 6 months ago (December 31, 2009) a mortgage payment on a 200k loan is $69.12 less a month for a drop of 6.33. That is pretty substantial considering rates were already pretty low 6 months ago.
Moving forward it's hard to know where rates are going in the short term. If the economy continues to sputter rates will probably stay where they are or decrease slightly. If the economy starts to improve, mortgage rates will likely move up perhaps drastically. So while it's hard to know where rates will be in a few months they will probably be substantially higher in a year from now.
by: Ki Gray
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