Sunday, January 13, 2008

30-Year Fixed Mortgage Rates Lowest in 28 Months

WASHINGTON -- Freddie Mac said 30-year home fixed-rate mortgages averaged 5.87% in the latest week -- the lowest since September 2005. A week ago the average was 6.07%, and in the year-earlier period it was 6.21%. From the most recent peak of 6.73% in mid-July 2007, 30-year rates have fallen almost a full percentage point (see chart above).

Will falling mortgage rates help the real estate industry turn around? Well, they sure can't hurt, and have to be a lot better for the real estate industry than rising rates! Example: payments on a $100,000 30-year mortgage at last July's rate of 6.73% ($647.27 per month) are almost 9.5% higher than payments at today's rate of 5.87% ($591.22 per month), suggesting at least some modest increase in affordability for home buyers.

4 Comments:

At 1/13/2008 3:37 PM, Blogger Gregory said...

This is an average; could it be that lenders have simply stopped making risky and thus high rate mortgages? The test would be to check that the volumes have not fallen.

 
At 1/14/2008 1:19 PM, Anonymous Marko said...

This would be great if I could buy a house for less than 500k in my area. I sure hope prices and interest rates drop much more! Of course, prices previously went up when rates went down, so we will see. More fed rate cuts to come . . .

 
At 2/18/2008 9:11 PM, Anonymous Anonymous said...

when is the conforming loan limit going to increase?

 
At 11/21/2008 3:24 PM, Anonymous Anonymous said...

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