Thursday, January 01, 2009

Mortgage Rates Fall to Record Low Level

30-year fixed rate mortgages closed out the year at 5.14% (data here, see graph above), the lowest rate on record (data back to 1964 here). Falling mortgage rates and falling home prices will be important factors in the real estate market's recovery in 2009.


At 1/01/2009 11:58 AM, Blogger lineup32 said...

311 Sandtree Dr
Palm Beach Gardens, FL 33403 $60,000
2 Bed, 2 Bath, 1,338 Sq Ft
Property Type: Condo/Townhouse/Co-Op

$60,000 is what they are asking today 1/1/09
$59,900 is what it sold for Jan. 1980

The RE narrative that RE always goes up, its a great time to buy, RE is a investment, buy and hold and other steams of information from the banking and RE financial media PR machine are running out of greater fools. RE prices are set at the margin's and low interest rates is another sign of low demand.

At 1/01/2009 6:07 PM, Blogger DaveinHackensack said...


I wonder how comprehensive that data is. My parents got a 30-year fixed rate mortgage for about 4% in the late 1960s.


Over the long term, real estate, if bought for a reasonable price (e.g., a home price of 3x the average income for the area or less) tends to appreciate inline with inflation. Considering that the average home buyer is only putting 20% or less down, that can end up being a pretty good investment, due to the effects of leverage. The tax advantages are an added bonus. They key, as with every investment, is to buy at the right price.

When I bought my place, back in 2000, I figured that the cost of owning it (with a 8.5% mortgage at the time) was the same as renting, even before taking into account the mortgage interest deduction. That made it a no-brainer.

At 1/01/2009 7:16 PM, Anonymous Anonymous said...

Lineup - that example you give is utter nonsense.

At 1/01/2009 8:37 PM, Blogger lineup32 said...

DaveinHackensack: you didn't buy a house you bought a mortgage.

Kevin: based on public records.

At 1/01/2009 9:29 PM, Anonymous Anonymous said...

Provide the link to the public records lineup - I don't believe it.

At 1/02/2009 12:26 PM, Blogger lineup32 said...

Kevin your link to the Palm beach property.

At 1/02/2009 2:37 PM, Blogger lineup32 said...

Kevin: not sure that link works very well. Put the address in Google search and one of the links offered will be Palm Beach county property appraiser site, click on that link and find the address listed. Then find the ALL Sales tab which will show sales back to 1980.

311 Sandtree Dr
Palm Beach Gardens, FL 33403 $60,000
2 Bed, 2 Bath, 1,338 Sq Ft

At 1/03/2009 10:58 PM, Anonymous Anonymous said...

I learned something valuable from Robert Kiyosaki:

I approach things with a "how can I profit from this?" perspective.

Unfortunately, I'm not seeing any way to profit from these "record low level" mortgage rates.


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