According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.67 percent (with 0.7 points) for the week ending today, another new all-time low, down from 3.75 percent last week, down from 3.83 percent last month and versus 4.49 percent a year ago.
The average 15-year fixed mortgage rate also recorded a new all-time record low of 2.94 percent, down from 2.97 percent last week, down from 3.05 percent last month and versus 3.68 percent a year ago.
As rates dropped, however, mortgage applications to purchase homes in the U.S. fell 13 percent last week affected by the Memorial Day holiday, down 3 percent year-over-year. Refinancing activity increased 2 percent according to the Mortgage Bankers Association. If there isn’t a need to finance on a unencumbered property then there are other alternative loaning methods that homeowners can use.
? Record-Setting Low Fixed Mortgage Rates Persist [Freddie Mac]
? Fixed Mortgage Rates Hit All-Time Lows (Again) [SocketSite]
? Mortgage Applications Increase in Latest MBA Weekly Survey [mbaa.org]
I just put in an application two days ago with my credit union and they gave 3.65% on a 30 year. So yeah, these rates are attainable.
What is the practical time limit on keeping rates so low? They are very close the inflation rate now so it is hard to see how a bank can profit without government backing. How long can the Fed hold out?
I think they can hold out as long as there are no better alternatives, meaning until either Europe sorts it’s business out (eurobonds?), or we get a real functioning economy that has growth based on proper fundamentals, that can sustain growth without government intervention.
scurvy, if you don’t mind asking, what is your CU?
lyqwyd – so one scenario could be a decent sized country with a credible market pulling itself out of the economic turmoil and attracting investment? I wonder whether an emerging market like Brazil, India, or China could take the lead. Could be a boon for their economy.
I don’t personally think a single country other than China could do it, and even that is questionable, although in the long term (5-20 years) I think that is exactly what will happen.
In the short to medium term, barring a real economic recovery, I think Europe getting itself out of this current mess is the only thing that will put upward pressure on interest rates.
And since I don’t believe we’ll see a real recovery until Europe is fixed (and maybe not even then), I don’t think rates will go up until the Europe situation is resolved, and that still seems to be at least 6 months, if not several years, from being honestly resolved.
I re-fied into a 15 year at 3.375% about six months ago. My wife was right, I should have waited.
Alt-A loans from the ’06-’07 purchases are very low as well keeping people in houses vs. forclosure (looking Macro). I don’t see the government wanting to change that anytime soon.
“How long can the Fed hold out?”
……, 2006, 2007, 2008, 2009, 2010, 2011, 2012,…….
Rates have been below 7% for a long time. The rates now are really crazy. But its clear that any rate increases will be slow and steady and will take many years.
We wouldn’t see 7% again until 2015 if the Fed started to increase the rate .25 each quarter for here on out. Raise your hand if you think that is going to happen.
Would love to hear more details from those getting recent financing. I’m sensing a lot of shadiness from lenders now–they seem to be hiding information and reluctant to even quote thoroughly. Despite supposedly low rates there seem to be no good deals in SF. WF is asking for 16 months’ reserve in non-retirement funds, and wants to write interest-only variable HELOC’s (gasp!) on top of the first. When I see quotes of 3.75% and banks quote 4-4.25% and don’t have a good reason, I’m beginning to think the days of competition are over. I know the days of 0% down are gone, but is it really 25% now? For a $1M piece of junk in SF, who wants to plop down 250k?
Hey Scurvy, where did you go to get that rate?
Well the Fed has already gone on record saying they don’t anticpate any rate increases before fall 2013. Also historically its taken about a decade to recover from a credit crisis. So I expect we will have low rates (below 7%) for another five years.
While I think the US economy will stay out of a recession this year, it would not surprise me to see a continuation of the pattern we had since the recession officially ended, which is short periods of improving growth followed by short slowdowns where the economy stalls but doesn’t officially enter another recession, then starts to recover again only to stall again. This is what happens when you pull the bandaid off slowly.
All the while Option-ARM loans will be sweet. No Tsunami in sight.
right, no tsunami. Foreclosures over the last few years have been, you know, right in line with patterns from the last couple of decades! Nothing to see here!
[Editor’s Note: Pre-Foreclosure Activity Ticks Back Up In San Francisco and our 2011 Retrospective.]
anon,
I wish there had been more. I would have probably gotten a sweeter deal than my current place. But nope. Nothing much in my pricepoint and all cash was a bit of a drag for a mere mortal.
True, about 15-20% of SF sales have been foreclosures or short sales for the last few years. If that had been 50%, prices would have fallen even more. But the numbers have nevertheless been huge. Let’s call it not a tsunami but a “big, massive, unprecedented and heretofore inconceivable wave.”
@asiagoSF and @sammy: StarOne (down the peninsula)
@bearit If you really have 20-25% to put down, you can get rates in the mid 3% range. If you don’t have 20%, you will be starting at 4% and go with the interest only HELOCs as a second. At least that’s what I’ve found while shopping around.
Editor, any word if Congress is going to make PMI deductible in 2012? They passed temporary measures doing so from 2007-2011.
Nevermind, forgot that PMI deduction phased out starting at AGI of $100k and gone at $110k. Anyone who can afford a decent place in SF is probably well above that. Those below that are probably buying cheaper places with FHA loans.
As an example, SFGate says 29 foreclosures in SF in April 2012. Redfin says 576 sales. So about 5%. Is that abnormal?
http://www.sfgate.com/webdb/foreclosures/
http://www.redfin.com/city/17151/CA/San-Francisco
[Editor’s Note: How foreclosure activity has changed in San Francisco over the past five years: San Francisco Bucks CA Foreclosure Trends, But Not In A Good Way.
In 2007 there were a little over 110 foreclosures in San Francisco versus 6,294 sales, a rate of roughly 1.7%.]
Sorry, I should have been more clear.
Is 5% normal since the start of the downturn?
Thanks Scurvy!
These rates, actually even better right right now, are definitely attainable. Doing three re-fi’s right now, locked all of them this past week, used a couple of credit unions including Star One. Basically same rate as scurvy said. Decided to go all with CU’s this time and paying off mortgages at WF, Citibank; the CU’s have the daily rates updated on their sites every day, so I could monitor and time exactly when to lock. No secret rate sheets that I can’t see.
That said, Citibank is claiming “employee pricing” on a promotion for jumbo 30-year at 3.875%, and it is on their site. Great rate if true, but the ad says “rate subject to change” at any time…
That whole notion about SF bucking the trend but not in a good way remains opinion that overlooked countless moving parts. And the City remains imbalanced in that regard, 17 months on.