| This week 30 year mortgage rates rose over half a | | | | 30-yr $1258.87 |
| point. This is the largest one week increase this year. | | | | 15-yr $1702.87 |
| It's interesting that the rate increases happened after | | | | 5-yr ARM $1217.16 |
| the bailout was passed by the government. Although | | | | 1-yr ARM $1093.28 |
| this is not a sign the bailout will fail its not a positive sign | | | | October 9th |
| of its future effectiveness. The primary purpose of the | | | | 30-yr $1191.39 |
| bailout was to influence banks to lend. And "hopefully" | | | | 15-yr $1647.99 |
| taking away billions of bad loans would cause banks to | | | | 5-yr ARM $1647.99 |
| ease restrictions and lower rates. Instead we are | | | | 1-yr ARM $1092.05 |
| seeing a dramatic rise in rates. In essence the banks | | | | September 25th |
| are saying thanks for the money but it's not going to | | | | 30-yr $1210.69 |
| cause us to lend. How much have rates risen? | | | | 15-yr $1662.96 |
| Besides a period at the end of July and the beginning | | | | 5-yr ARM $1201.67 |
| of August 30 year mortgage rates are the highest | | | | 1-yr ARM $1093.28 |
| they have been all year. Below are rates for the last | | | | So as we can see the rate increases this week are |
| few weeks. | | | | anything but trivial. For a 200k mortgage the mortgage |
| October 16, 2008 | | | | payment increased $67.48 which translates into a |
| 30-yr 6.46 15-yr 6.14 5-yr ARM 6.14 1-yr ARM 5.16 | | | | 5.7% increase. So what is going to happen in the next |
| October 9, 2008 | | | | two weeks? Last week we said we didn't know if |
| 30-yr 5.94 15-yr 5.63 5-yr ARM 5.90 1-yr ARM 5.15 | | | | rates were going to go up or down but we felt |
| October 2, 2008 | | | | mortgage interest rates would probably be volatile |
| 30-yr 6.10 15-yr 5.78 5-yr ARM 6.00 1-yr ARM 5.12 | | | | given the current market. That's what we saw this |
| September 25, 2008 | | | | week and we continue to see a pretty volatile market. |
| 30-yr 6.09 15-yr 5.77 5-yr ARM 6.02 1-yr ARM 5.16 | | | | Additionally, I think the chance that rates will go down |
| The thing that jumps out here is that Arm rates | | | | this week is greater than the chance they will go up. |
| jumped up less than rates on fixed mortgages. In fact | | | | Basically, after a large move up or down rates tend to |
| 1 year arms hardly moved at all this week. This is | | | | have a slight correction the next week. The other bit |
| probably because fixed rate mortgages have fallen | | | | of news is that the government is having a 7,500 tax |
| more over the last 2 months. In contrast, 1 year arms | | | | credit for first time home buyers. So hopefully that will |
| have kept pretty steady the last few weeks. | | | | to some degree offset the negative impact of higher |
| Ok let's look at what these rates mean for an actual | | | | interest rates. The real question is what is going to |
| mortgage payment. Looking at a 200k loan lets see | | | | happen over the next few months. The hope is that |
| what current mortgage rates translate into for a | | | | the bailout will eventually lower mortgage rates. But the |
| mortgage payment. In addition to today's rates we also | | | | initial reaction (the largest jump all year) is anything but |
| looked at rates from last week and last month. | | | | positive. |
| October 16th | | | | |