Mortgage Rates The Volatility is Gone
http://www.realestatebuz.com/articles/8908/1/Mortgage-Rates-The-Volatility-is-Gone/Page1.html
Ki Gray
Located in Austin Texas Austin Real Estate offers potential investors with advice and expertise about the Austin Real Estate market. Their website offers a free Home Search of the Austin MLS along with description of the different downtown Austin Condos By Ki Gray
Published on 02/8/2010
Mortgage rates have been surprising stable. This article looks at this and other news in the mortgage industry.
After dropping for 4 weeks in a row the 30 year rate rose slightly this week moving from 4.98 to 5.01. The 15 year rose from 4.39 to 4.40. The 5 and 1 year arms rose from 4.25 to 4.27 (5 year arm) and 4.29 to 4.22 (1 year arm). Below are rates from the weeks from Jan 07, 2010 to Feb 04, 2010
Feb 04, 2010
30-fixed 5.01 15-fixed 4.40 5 ARM 4.27 1 ARM 4.22
Jan 28, 2010
30-fixed 4.98 15-fixed 4.39 5 ARM 4.25 1 ARM 4.29
Jan 21, 2010
30-fixed 4.99 15-fixed 4.40 5 ARM 4.27 1 ARM 4.32
Jan 14, 2010
30-fixed 5.06 15-fixed 4.45 5 ARM 4.32 1 ARM 4.39
Jan 07, 2010
30-fixed 5.09 15-fixed 4.50 5 ARM 4.44 1 ARM 4.31
Aug 06, 2009
30-fixed 5.22 15-fixed 4.63 5 ARM 4.73 1 ARM 4.78
All in all we saw hardly any movement with any of the rates this week. And although rates fell the previous 4 weeks we saw very little movement as well. Since January 7, 2010 the 30 year rate has stayed in the range of 4.98 to 5.09. This is in contrast with the last year when rates have seen enormous volatility. Basically in the last month there has been no huge news that would affect the mortgage industry. For the time being, the economy doesn't seem to be improving or getting much worse.
In addition to rates it is interesting to analyze mortgage payments. We took a today's rates and translated it into a 200k loan we also did the same thing with rates from January, 21 2010 and rates from August, 06 2009 (six months ago).
Feb 04
30-year $1074.86
15-year $1519.78
5-year ARM $986.22
1-year ARM $980.37
Jan 21
30-year $1072.42
15-year $1519.78
5-year ARM $986.22
1-year ARM $992.09
Aug 06
30-year $1100.69
15-year $1543.3
5-year ARM $1040.88
1-year ARM $1046.91
As we can see the movement has been minimal in the last 2 weeks. In fact a mortgage for a 200k loan would only be 2.43 more a month today than 2 weeks ago. Six months ago a mortgage would have been $25.83 more a month.
So what is our advice to people looking for a mortgage in the next few months? The difference between a 30 year rate and the 5 and 1 year arm has grown over the last few months which makes them more enticing. But I would still recommend a 30 year mortgage. Basically, rates are near historic lows and it makes the most sense to lock in as long as possible. The second question is where are rates heading. Over the next few weeks it's hard to tell. They might move down a little more if the economy continues to do poorly. But on the other hand sometime between now and the next 12 months the expectation is that rates are going to rise substantially. So there is probably a large risk for waiting to lock into a rate and there is little upside since its doubtful rates will drop substantially.
Feb 04, 2010
30-fixed 5.01 15-fixed 4.40 5 ARM 4.27 1 ARM 4.22
Jan 28, 2010
30-fixed 4.98 15-fixed 4.39 5 ARM 4.25 1 ARM 4.29
Jan 21, 2010
30-fixed 4.99 15-fixed 4.40 5 ARM 4.27 1 ARM 4.32
Jan 14, 2010
30-fixed 5.06 15-fixed 4.45 5 ARM 4.32 1 ARM 4.39
Jan 07, 2010
30-fixed 5.09 15-fixed 4.50 5 ARM 4.44 1 ARM 4.31
Aug 06, 2009
30-fixed 5.22 15-fixed 4.63 5 ARM 4.73 1 ARM 4.78
All in all we saw hardly any movement with any of the rates this week. And although rates fell the previous 4 weeks we saw very little movement as well. Since January 7, 2010 the 30 year rate has stayed in the range of 4.98 to 5.09. This is in contrast with the last year when rates have seen enormous volatility. Basically in the last month there has been no huge news that would affect the mortgage industry. For the time being, the economy doesn't seem to be improving or getting much worse.
In addition to rates it is interesting to analyze mortgage payments. We took a today's rates and translated it into a 200k loan we also did the same thing with rates from January, 21 2010 and rates from August, 06 2009 (six months ago).
Feb 04
30-year $1074.86
15-year $1519.78
5-year ARM $986.22
1-year ARM $980.37
Jan 21
30-year $1072.42
15-year $1519.78
5-year ARM $986.22
1-year ARM $992.09
Aug 06
30-year $1100.69
15-year $1543.3
5-year ARM $1040.88
1-year ARM $1046.91
As we can see the movement has been minimal in the last 2 weeks. In fact a mortgage for a 200k loan would only be 2.43 more a month today than 2 weeks ago. Six months ago a mortgage would have been $25.83 more a month.
So what is our advice to people looking for a mortgage in the next few months? The difference between a 30 year rate and the 5 and 1 year arm has grown over the last few months which makes them more enticing. But I would still recommend a 30 year mortgage. Basically, rates are near historic lows and it makes the most sense to lock in as long as possible. The second question is where are rates heading. Over the next few weeks it's hard to tell. They might move down a little more if the economy continues to do poorly. But on the other hand sometime between now and the next 12 months the expectation is that rates are going to rise substantially. So there is probably a large risk for waiting to lock into a rate and there is little upside since its doubtful rates will drop substantially.