Mortgage Rates Rise Off of Historic Lows
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Two weeks ago mortgage rates hit historic lows with the 30 year falling to 4.78. The next week they fell even further to 4.71. This week they rose back up to 4.81. Although they rose a tenth of a point the mortgage rates are still near historical lows. Below are the nine lowest rates of all time. Not surprisingly they all occurred in 2009.
1. Dec 3rd – 4.71
2. April 30th – 4.78
3. April 2nd – 4.78
4. Nov 26th – 4.78
5. April 23rd – 4.80
6. Dec 10th – 4.81
7. April 16th – 4.82
8. May 21st – 4.82
9. Nov 19th – 4.83
So despite the increase from last week today’s rates are the 6th lowest rates of all time. The other major mortgage products increased as well. The 15 year mortgage rose from 4.27 to 4.32 and the 5 year arm rose from 4.18 to 4.26. The 1 year arm was the only product to fall going from 4.25 to 4.24. Below are rates from the weeks from Nov 12, 2009 to Dec 10, 2009
Dec 10, 2009
30-fixed 4.81 15-fixed 4.32 5-yr ARM 4.26 1-yr ARM 4.24
Dec 03, 2009
30-fixed 4.71 15-fixed 4.27 5-yr ARM 4.18 1-yr ARM 4.25
Nov 26, 2009
30-fixed 4.78 15-fixed 4.29 5-yr ARM 4.18 1-yr ARM 4.35
Nov 19, 2009
30-fixed 4.83 15-fixed 4.32 5-yr ARM 4.25 1-yr ARM 4.35
Jun 11, 2009
30-fixed 5.59 15-fixed 5.06 5-yr ARM 5.17 1-yr ARM 5.04
In addition to rates it’s interesting to at times to run numbers on actual mortgage payments. We calculated the mortgage on a 200k based on today’s rates. We did the same thing with rates from 2 weeks ago and rates from 2 months ago.
Dec 10
30-year $1050.53
15-year $1511.65
5-year ARM $985.05
1-year ARM $982.7
Nov 26
30-year $1046.91
15-year $1508.6
5-year ARM $975.7
1-year ARM $995.62
Jun 11
30-year $1146.89
15-year $1587.84
5-year ARM $1094.51
1-year ARM $1078.53
The difference from 2 weeks ago is pretty minuscule with a 200k mortgage costing 3.62 more a month this week. If we compare rates to six months ago it’s a little more interesting. A 200k mortgage would cost $96.36 less a month today than it did six months ago for a drop of 8.4 percent.
So what is our advice for people looking for a mortgage? I would probably avoid the 5 and 1 year arm and stick with the 30 or 15 year fixed. The general expectation is that rates are rising so there is no reason to be stuck with refinancing at higher rates in 1 or 5 years.
So what do we see happening in the future with mortgage rates? I would expect they will bounce around for the next few months. The economy seems to be improving but it’s going to take awhile before we get out of the doldrums. But once the economy starts to pick up its expected rates could rise perhaps dramatically.
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