Mortgage Rates Down…Again

Mortgage rates continued their downward trend over the last few weeks and are down an average of 1.2 points since November 1, 2008. The last time they were this low was in 2003, which was near 40 year lows.

Though the graph above shows the average 30 year fixed rate mortgage at 5.20 percent, I've had several buyers with excellent credit get sub-5 percent rates. One buyer client was quoted 4.875 percent with no points and another was quoted 4.625 percent with .25 points within the last 2 weeks (both were through Darran Anthony of Suntrust Mortgage in Loudoun County).

Though the Fed would love to see rates at 4.5 percent, I don't think that'll happen (without points). The Fed has fired their last shot by lowering their fund rate to pretty much zero and it can't go negative. What you see right now is probably at or very near the bottom so take advantage of it if you can.

Photo credit: BankRate.com

Mortgage Rate Round-Up – August 23, 2008

Rates dipped down for the second straight week despite the not-so-good news about inflation. Wholesale prices jumped 1.2 percent in July, much more than expected (and at the fastest pace since 1981). Normally, you would expect interest rates to rise on such news, but they didn't.

Despite the lower rates, mortgage applications fell to their lowest level in almost eight years. The Mortgage Bankers Association's index of loan applications was down 1.5 percent compared with the previous week, and was down 34.2 percent compared with the same week last year.

One thing to keep a close eye on is the Fannie/Freddie situation. Both suffered further losses to their stock prices especially after the Barron's article "The Endgame Nears for Fannie Freddie" was published August 18. Some say that a government takeover would lead to an increase in rates because of uncertainty regarding the transaction. Others say that a takeover would end the period of uncertainty, not start one, and the effect on rates would be minimal, if any. We'll have to wait and see…

Source: BankRate.com

***UPDATE: The Department of Veterans Affairs (VA) is raising their loan limits from $417,000 to as much as $729,000 in some areas. The increases are effective immediately under the Housing and Economic Recovery Act of 2008.

A Look At Mortgage Rates In Virginia

Here’s a look at the average 30-year fixed rate mortgage and 5/1 ARM rates in Virginia over the past 3 and 12 months. (Click on any chart to enlarge)

Here’s a chart showing the average rate on a 30-year fixed rate mortgage in Virginia over the last 3 months:

Now here are the past 12 months:

As you can see, rates shot up almost a full point earlier this year, came down a bit in late February and are around 5.9 at the moment though pointing up.

Now let’s compare the average 30-year fixed rate mortgage rates to the average 5/1 ARM rates.

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