Thursday, September 29, 2011

Mortgage Rates Fall Again to New Record Lows

According to data released today by Freddie Mac, 30-year fixed mortgage rates fell this week to another new historic low of 4.01% (see chart above), and 15-year rates fell to a new record low of 3.28%.  Based on the most recent one-year increase in the CPI of 3.8% through August, 15-year mortgage rates are below the current annual inflation rate and 30-year rates are just barely above current inflation.   


At 9/29/2011 9:33 AM, Anonymous Anonymous said...

Why would you assume that the current rate of inflation continues, rather than using readily available market-based predictions of inflation?

At 9/29/2011 9:39 AM, Blogger morganovich said...

and mortgage issuance continues to languish at low levels while the % of the market taken over by the federal government (freddy and fannie) continues to rise.

F+F are 75% of this market.

it's federal price fixing and market manipulation.

this spills over into the treasuries market, as banks, boxed out of the mortgage market by F+F's zero cost of capital are forced to hold balance sheets of levered US govvies.

i'm not sure there has been any point in US history when markets were so manipulated by the feds. certainly not since ww2.

At 9/29/2011 1:37 PM, Blogger Bruce Hall said...

While low rates are potentially good news for buyers, they represent sour grapes for home owners who bought within the past decade and can't refinance at those lower rates because the appraised values of their homes have dropped so dramatically.

At 9/30/2011 3:24 PM, Blogger VangelV said...

These are not rates set by the market. The US has a command economy now and rates are set by the central planners who run most of the financial economy. The data tells you nothing of value except that there is a huge bubble in debt instruments that will either collapse or will require a huge intervention by the Fed. In either case the taxpayer is screwed.


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