Real Estate Blog - Rate drop in September 2009 spells good news for consumers

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Rate drop in September 2009 spells good news for consumers

Plastered all over the media this past week was news that mortage rates fell for the week ending September 7-11 2009 as a result of Fed auction results. The rates are now near historic lows. Here are a few links to stories about the drop which was announced primarily on September 10th 2009:

http://www.mortgagenewsdaily.com/consumer_rates/106240.aspx

http://www.freddiemac.com/pmms/release.html

http://www.housingwire.com/2009/09/10/weekly-mortgage-rate-dips-to-507-freddie-mac/

http://www.foxbusiness.com/story/markets/industries/finance/freddie-mac-fixed-mortgage-rates-inch-lower/

From the Fox news article above: "The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 5.07% in the week ending Thursday, down from last week's 5.08% and the year-ago 5.93%"

Some pundits are even predicting mortage rates will fall further:

http://themortgagereports.com/2009/09/mortgage-rates-cincinnati-september-10-2009.html

Comparing 5.07%, the new rate, with last years 5.93%, shows that on a $100,000 30 year fixed loan a buyer today would pay $541.11 dollars, compared to $595.06 for the same amount last year, or about 9% less. Wow! What a difference a year can make. With good rates and the $8,000 tax credit in place until November 30th 2009, buying vs. renting just make start making a whole lot more sense to some people.

Posted by Matt Grohe CRS, GRI, ABR on 09/13/2009 01:28 PM

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3 Comments on Rate drop in September 2009 spells good news for consumers

SEP

Amen it would seem that the individule home buyer's would flock to the new money.

It is amazing that the phones have not started ringing off the hook as they would in the past.

SEP

Matt- another good post.

I want everyone to keep in mind that rates are often state specific. Rates are also based upon the credit score of the buyer. A 690 credit score on a Conventional 30 year fixed mortgage may have a .25 higher rate than a buyer with a score over 720.

FHA rates are pretty much the same for everyone with a score over 660, but if the buyer has a 621, then their rate will be a bit higher. Also, FHA buyers with scores over 720 can see a rate improvement of up to .50 in many cases.

VA rates are similar to FHA rates, but often about .125% higher than FHA.

Rates also depend upon the day we "lock in" the rate. I have many buyers that do not want to play the market, others want to wait until after the latest unemployment #'s come in to see what happens.

It is wonderful that rates are so low, but I want everyone to keep in mind that it is buyer/credit score specific in many cases as well. So if you were in a closing yesterday on an FHA loan and the rate was 5.5% and today with a different buyer and the rate was 5%........there is a reason for that.

If you ever have a doubt about the rate your client has been quoted, call the Loan Officer and ask them WHY?

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