Mortgage Rates Fall To .01 Points Above All Time Historic Low

The 30 year rate fell from 4.79 to 4.72 this week

. This is the lowest point this year. The previous low was 4.78 reached two weeks ago. What is more interesting is that the all time low is 4.71 so just .01 points lower than current rates.

Looking at other rates the 15 year dropped from 4.20 to 4.17. The 5 and 1 year arms dropped from 3.94 to 3.92 (5 year arm) and 3.95 to 3.91 (1 year arm). These are all time lows since we have good tracking data for these mortgage products.

So would it make sense to look at some of these other mortgage products since they are at all time lows? Personally I would still avoid the 5 and 1 year arm. Since mortgage rates in general are so low it makes sense to lock in for as long as possible. Below are rates from the weeks from May 13, 2010 to Jun 10, 2010.

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 27, 2010

30-fixed 4.78 15-fixed 4.21 5 ARM 3.97 1 ARM 3.95

May 20, 2010

30-fixed 4.84 15-fixed 4.24 5 ARM 3.91 1 ARM 4.00

May 13, 2010

30-fixed 4.93 15-fixed 4.30 5 ARM 3.95 1 ARM 4.02

Nov 26, 2009

30-fixed 4.78 15-fixed 4.29 5 ARM 4.18 1 ARM 4.35

So rates are one thing but it's also informative to calculate mortgage payments. We took today's rates and calculated a mortgage payment on a 200k house. We also did the same thing with rates from May, 13 2010 and rates from November, 26 2009.

Jun 10

30-year $1039.68

15-year $1496.47

5-year ARM $945.62

1-year ARM $944.48

May 13

30-year $1065.1

15-year $1509.62

5-year ARM $949.07

1-year ARM $957.13

Nov 26

30-year $1046.91

15-year $1508.6

5-year ARM $975.7

1-year ARM $995.62

So compared to a month ago a mortgage payment is $25.42 less a month for a drop of 2.45 percent. While that is not a huge drop it is considering rates from last week were already pretty low.

So what is going to happen moving forward? As always it's hard to tell. If the economy continues to have a rocky recovery I would expect that rates will stay at current levels and possibly break down to new all time lows in the next few months. If the economy starts to rebound we should see mortgage rates move higher perhaps much higher. Over the next 6 months while it's hard to know which way mortgage rates will move if they move up they could move up substantially while if they drop they do not have much room to fall.

by: Ki Gray

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