Mortgages rates fall to record lows — again
NEWS SUMMARY – From Freddie Mac’s weekly survey, the average 30-year fixed-rate mortgage fell to 3.91% this week — the lowest in at least four decades and the sixth such record this year. Interest charged on adjustable-rate mortgages (ARMs) likewise fell to record territory: The 5-year ARM fell to a record-low 2.85% and the 1-year ARM fell to a record-low 2.77%. The 15-year fixed was unchanged from last week’s record low of 3.21%.
Rates on 30-year fixed mortgages been at or below 4% for the past two months, Freddie Mac reported. Payments on a $200,000 loan are now at least $100 a month lower than at the start of the year. (See chart upper right.)
WHAT I SEE – From rate sheets hitting my desk that are not part of Freddie Mac’s survey: A 10-year fully amortized fixed rate is available at 2.99 percent and 1 point. The 30-year conforming plus fixed rate ($417,001 to $625,500) is 3.875 percent and 1 points. A 15-year conforming plus fixed rate loan is at 3.25 percent and 1 point. FHA 30-year fixed jumbo ($417,001 to $729,750) is 3.75 percent and zero points.
WHAT I THINK – The Federal Housing Finance Agency is considering a 5-year reprieve from interest payments for underwater borrowers who file a Chapter 13 reorganization bankruptcy. This is for borrowers with federally insured loans. Congressional approval is not in play.
It sounds like you may have an opportunity of free rent for 5 years should you meet the criteria. It looks to me that the underlying issue is finding new solutions to end a further collapse in property values caused by underwater borrowers walking away. It’s estimated that 25% of all homes with mortgages are upside down.
Fannie Mae’s chief economist, Doug Duncan thinks there is a 40% chance of a double-dip recession next year.
All of this means definitely continued low rates next year.
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