Rates happen to be relatively low during the last month. Immediately, these are in the news by falling to an alternative in history historical low.
The 30 yr rate fell from 4.75 to 4.69 immediately. A couple weeks ago the Thirty year rate was sitting at 4.72. What's interesting is the fact that over the last month, when a lots of people have been referring to how rates are about to start rising, were instead breaking records with mortgage rate lows. We mostly concentrate on the 30 yr rate which is the most traditionally used mortgage product. And for the 30 year rate hitting an all-time low the three other major mortgage products all reached new all time lows too. The 15 year dropped from 4.20 to 4.13. The 5 and One year arms dropped from 3.89 to 3.84 (5 year arm) and 3.82 to a few.77 (Twelve months arm). Underneath are rates through the weeks from May 27, 2010 to Jun 24, 2010
Jun 24, 2010 30-fixed 4.69 15-fixed 4.13 5 ARM 3.84 1 ARM 3.77
Jun 17, 2010 30-fixed 4.75 15-fixed 4.20 5 ARM 3.89 1 ARM 3.82
Jun 10, 2010 30-fixed 4.72 15-fixed 4.17 5 ARM 3.92 1 ARM 3.91
Jun 03, 2010 30-fixed 4.79 15-fixed 4.20 5 ARM 3.94 1 ARM 3.95
May 13, 2010 30-fixed 4.93 15-fixed 4.30 5 ARM 3.95 1 ARM 4.02
So as well as considering rates on mortgages rising additionally it is necessary to take a look at home loan repayments. We took today's rates and translated them in to a mortgage payment for a 200k loan. We also did the identical things with rates from May 13th.
Jun 24 30-year $1036.07 15-year $1492.43 5-year ARM $936.47 1-year ARM $928.5
May 13 30-year $1065.1 15-year $1509.62 5-year ARM $949.07 1-year ARM $957.13
So although rates were already pretty low on May 13th today a payment on a 200k loan is around $30 less 30 days for any drop of the little less than 3 percent.
Precisely what is going to happen on the next couple of months? Its certainly possible rates could fall a bit more and we could break some new records with home loan rates. I would be very impressed if rates fell below 4.25 unless the economy went in to a significant tailspin. Alternatively when the economy recovers rates should increase rapidly. Along with inflation spirals out of control I could see rates jumping in the double digits.
