Mortgage Rates On Their Way Down

December 18, 2008

Residential

Interest Rates On Their Way Down

Interest Rates On Their Way Down

Yesterday my sister-in-law’s mortgage broker gave her a call and let her know that at that moment he was able to grab a 4.5% refinance package for her. It turned out that for one hour?and one hour only?some company somewhere was offering a 4.5% loan. Because she didn’t have all her paperwork sitting on his desk, she unfortunately wasn’t able to grab the loan. (She remedied that right away this morning.) Both she and her broker are waiting, expecting they will have the opportunity again very shortly.

Stating the Obvious

It appears mortgage rates are, without a doubt, on their way down. Wherever you point your mouse: Interest.com, Crain’s ChicagoBusiness.com, The Chicago Tribune, and on and on. On all of these sites, there is at least one article talking about how interest rates are dropping. There has been talk for over a month about how the Treasury Department was working to push interest rates to 4.5%. Maybe this much poo-poo’ed rumor is starting to come true. On Wednesday the Fed moved to lower the funds’ target rate to somewhere between 0% and 0.25%. This is the tenth rate cut in 15 months. Many predicted the Fed’s move would not have a short-term impact on mortgage rates, but those predictions appear to have been wrong.

Freddie Mac polled large lenders on Monday through Wednesday of this week and found that nationwide the average rate dropped to 5.19%, down from 5.47% the previous week and 6.14% at the same time last year. This is a historic low; Freddie reported that this is the lowest rate they have seen since they started collecting data in 1971. The previous low was 5.21% in June 2003.

Interest.com is reporting that it’s huge database of lenders is showing borrowers with good credit can expect to get a fixed-rate loan for as low as 5.125% and should be able to hold fees to below $1,000. And they see no indication that this rate will be going up any time soon. In fact, it looks like it might continue its downward slide.

How About Chicago?

Tonight Interest.com is reporting that the average 30-year fixed rate mortgage in Chicago is 5.64% and a jumbo is 7.59%. I did an new-purchase mortgage application on several mortgage sites for a $300,000 in Chicago and was offered rates of between 5.125% and 5.625%. It looks like the Chicago number will be dropping quickly as well.

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About Rod Holmes

Rod has been a broker working in Chicago since 2004. He has worked with developers, buyers, sellers, and as well as managing offices. He is currently a partner in Chicago Style SEO working primarily with real estate firms to improve their Internet marketing. Rod lived for nearly ten years in Japan where he owned a corporate training and executive coaching firm with clients including Hitachi and 3M Japan. He lives in Lakeview with his wife and two children. He enjoys coaching and watching his kids participate in sports, cycling, camping, and traveling in general. You can find Rod online on Twitter at @roddesu, Facebook and LinkedIn.

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