Rates Fall in December

Here's something few people expected: Despite a rising federal deficit, an expanding economy and a largely "jobless" recovery, mortgage interest rates fell in December -- from 6.02 percent plus .6 points on Dec. 4th to 5.81 percent plus .7 points on December 25th, according to Freddie Mac.

The drop is not quite as large as it seems -- a somewhat larger cost for points eats up some of the benefit from lower rates. Still, given economic expansion and big deficits higher rates would seem to have been in order.

For a $100,000 loan, a borrower would pay $600.84 per month for principal and interest over 30 years at 6.02 percent. In comparison, the same loan at seven percent -- a "low" rate not too long ago -- would cost $665.30.

By the measures of the past several decades 2003 was a wonderful year to be a borrower. What about rates in 2004? No one knows for sure, but for the latest rate information and property trends speak with your local broker. There may be more -- and good -- surprises in the marketplace.

Fed Leaves Rates Unchanged, But..

WEDNESDAY AFTERNOON UPDATE: The first FOMC meeting of the year adjourned with no change to key short-term interest rates, but still resulted in considerable selling of bonds and stocks. The Dow closed down 141 points, while the Nasdaq finished the day down 38 points. The bond market is down 27/32, which created upward revisions to mortgage rates of approximately .75 of a discount point.

While the Fed didn't make any changes to key short-term rates, it did make a slight change to its post meeting statement that seems to have caused concern in the markets. The key difference was an exclusion of the words “considerable period” when describing how long they would keep rates this low. They instead used the word “patient”, which led many traders to think that a rate increase may be in the near future. It does seem a little silly that something that minor can cause such havoc in the markets, but it did.

It is too late to lock in under this morning's rates, so let's wait and see what tomorrow brings. The idea of a rate increase is thought to possibly slow the economic recovery. Whether it will or not remains to be seen. We don't even know for a fact that the Fed was trying to hint at an increase in the near future. But we do have some fairly important economic data being posted tomorrow. We could see investors realize that this afternoon was an overreaction or we may see more selling in bonds. The latter would mean another increase to mortgage rates tomorrow.

The 4th Quarter Employment Cost Index (ECI) is due to be posted tomorrow morning along with weekly unemployment claims. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets, but a variance from forecasted levels may have an impact on all of the markets, including mortgage rates.

If I were considering financing/refinancing a home, I would....
Float if my closing were taking place within 7 days...
Float if my closing were taking place between 8 and 20 days...
Float if my closing were taking place between 21 and 45 days...
Float if my closing were taking place over 45 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Mortgage Rates Drop Again!!

Mortgage rates dropped for the third consecutive week last week, with the average 30-year fixed rate mortgage falling from 6.06 percent to 6.01 percent, according to Bankrate.com's weekly national survey of large lenders. With the average 30-year fixed mortgage rate having fallen from 6.47 percent three weeks ago, rates are once again flirting with the six percent mark.

The average 30-year fixed rate mortgage was last below six percent on July 23, registering 5.99 percent. The mortgages in this week's survey had an average total of 0.32 discount and origination points.

The 15-year fixed rate mortgage popular for refinancing also retreated, from 5.37 percent to 5.33 percent. The jumbo 30-year fixed rate mortgage trickled two basis points lower to 6.44 percent, and the one-year adjustable rate mortgage dropped by a similar amount, from 4.09 percent to 4.07 percent. A basis point is one-hundredth of one percentage point.

9/22/03: Mortgage Rates Plummet Over The Last Two Weeks

Rates are heading back down. That's been the news the last couple of weeks. Please read the blurb below and then check our our Mortgage section to get the latest rates,etc..

Mortgage Rates Plummet Over The Last Two Weeks

In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.01 percent, with an average 0.5 point, for the week ending Sept.19, 2003, down from 6.16 percent last week. Last year at this time, the 30-year FRM averaged 6.05 percent.

The average for the 15-year FRM this week is 5.30 percent, with an average 0.5 point, down from last week's average of 5.46 percent. A year ago, the 15-year FRM averaged 5.47 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.81 percent this week, with an average 0.6 point, down from last week's average of 3.87 percent. At this time last year, the one-year ARM averaged 4.28 percent.

"Financial markets are feeling more confident that the Fed will not raise rates anytime soon. Add to that the fact that recent economic data shows core inflation is less than the market expects, and we see mortgage rates drop once again," said Frank Nothaft, Freddie Mac chief economist. "And although refinancing has fallen off somewhat, home buying activity remains vigorous, unfazed by market chatter that the end of the housing boom is near.

Going to Lunch

This is a test of a new category: Mortgage News, if all goes as planned I should have this category linked with a Mortgage news XML feed...Menus are working now as are the archives...now I just need to figure out the style sheets and RSS Feeds and we are golden!

Brent
http://www.greatmn.com