Mortgage Rates All Time Low – Delinquency Rates Remain High

I am still amazed at these historically low-interest rates.  These rates are too good not to take advantage of them, especially if you intend to stay in your home for any length of time.  One thing is for certain, these rates won’t last forever…

FreddieMac updated the average 30year fixed rate mortgage rate for the US today.  The average rate nationwide is 3.55% for a 30 year fixed rate mortgage according to Freddie Mac.

 

Now for the ugly side of the real estate market…  Below is the Delinquency Rate on Single Family Residential Mortgages.  This is what I would call “hang time” – the delinquency rate is hanging up above 10% since October 2010.  This is not good…

I think the obvious explanations for this is the high unemployment rates combined with underwater homeowners just walking away from their mortgages…

To track the delinquency rate from the “housing bubble burst”, many will say it was 2005 or 2006 –  I personally believe the bubble burst began in 2004 starting with the condominium market.  Either way – here are the delinquency rates from the above chart since Jan 1, 2005.  Look at it skyrocket in 2009.

2005-01-01   1.43
2005-04-01   1.55
2005-07-01   1.58
2005-10-01   1.63
2006-01-01   1.59
2006-04-01   1.62
2006-07-01   1.76
2006-10-01   1.95
2007-01-01   2.03
2007-04-01   2.30
2007-07-01   2.77
2007-10-01   3.08
2008-01-01   3.68
2008-04-01   4.38
2008-07-01   5.24
2008-10-01   6.65
2009-01-01   7.82
2009-04-01   8.64
2009-07-01   9.65
2009-10-01  10.48
2010-01-01  11.19
2010-04-01  11.20
2010-07-01  10.83
2010-10-01  10.14
2011-01-01  10.30
2011-04-01  10.59
2011-07-01  10.23
2011-10-01   9.91
2012-01-01  10.18

Source: Board of Governors of the Federal Reserve System

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Mortgage Rates Historically Low

Just waned to put this back out there, Mortgage Rates are historically low.  Below is the average 30 Year Fixed Rate Mortgage rate compared to the 10 year Treasury Note.  The rates are not directly tied to the 10 year treasury but trend closely to it.

With these EXTREMELY LOW RATES, this is a great time to refinance or purchase…

Below is Edina Realty Mortgage Rates as of 07/13/2012.  Click on link for more information.

Today’s mortgage rates

Products Interest Rate APR
15yr Fixed Conforming 2.875% 3.188%
30yr Fixed Conforming 3.500% 3.675%
30yr Fixed FHA 3.250% 4.329%
5yr ARM FHA 2.250% 3.061%

Rates as of 7/13/2012 9:15 AM Central

Important disclosures, assumptions
and APR View/print

Get more rates »

Rates provided by: Edina Realty Mortgage

 

 

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Mortgage Rates and Operation Twist 2

Mortgage Rates remain low as we are experiencing record low rates partly due to Operation Twist, which I am record of criticizing.   Operation Twist has been extended and the Treasury will continue to buy long term bonds in order to keep rates artificially low.

The reason I don’t agree with this is not that I don’t want to see low mortgage rates, but rather it that is another form of artificially propping up the housing market.  I don’t believe the housing market needs this given the low inventory levels.  Jobs is more of a factor to housing than interest rates.  There will be a price we pay for Operation Twist down the road…

In the meantime, you might as well take advantage of these record low mortgage rates…   The chart below shows how the 30 year Mortgage Rates trend with the 10 Year Treasury even though they are not directly tied together.

 

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10 year treasury moves up and the 30 Year mortgage rates are up

This is pretty interesting because this is the other direction than what the experts thought Operation Twist would have on the market.  John Murphy pointed this out earlier on his post, then tonight I saw the St Louis Fed had updated their 30year mortgage average rates.

There are 2 things I find really interesting here but can’t explain.

1) the spread gets larger between the mortgage rates and the 10 year treasury the lower the treasury goes.

2) the 10 year treasury is going up, when most thought it would go down as a result of Operation Twist.

Note: the 30 year mortgage is updated as of 10/13/2011.    The 10 year treasury is updated as of 10/11/2011 at 2.18%

Just curious what Edina Realty Mortgage rates are today…  Looks like they are heading up.

Today’s Mortgage Rates

The current interest rates shown below are based on a purchase of a single-family, primary residence. For current refinance rates, contact us

as of 10/13/2011 09:15 AM Central

Product Interest Rate APR
Conforming1 and FHA1 Loans
30-Year Fixed 4.250% 4.434%
30-Year Fixed FHA 3.750% 4.550%
15-Year Fixed 3.375% 3.692%
7-Year ARM 3.000% 3.238%
5-Year ARM FHA 2.750% 2.908%
Jumbo1 Loans – Amounts that exceed conforming loan limits1
30-Year Fixed 4.500% 4.644%

 

 Equal Housing Lender

The Nation's 11th Largest Mortgage lender is getting out of the business due to excessive regulations

Image representing MetLife as depicted in Crun...
Image via CrunchBase

WOW!  This puts things into perspective a bit.  We all complain about the banks on their underwriting and that they are “not lending” now.  I knew they were pummeled with new regulations but had no idea to what extent.

The nation’s 11th largest mortgage servicer and 13th largest mortgage originator is getting out of the business due to excessive regulations according to HousingWire.  If a company can walk away from a$115.9billion servicing business it has to be bad…

MetLife Bank, a division of insurer MetLife Inc. (MET: 31.75 0.00%), is selling the bank’s mortgage business, citing uncertainty in the marketplace and a regulatory environment that requires excessive resources.

…In 2010, MetLife Home Loans ranked as the 11th largest mortgage servicer in the U.S., with its servicing business valued at $115.9 billion in the fourth quarter. The company also ranked 13th on the list of mortgage originators, holding 1.4% of the market and originating roughly $22 billion in mortgages last year.

Read Full Article

 

This not the direction we should be heading in to improve the housing market.  Having more banks lending would be helpful, not banks walking away from the business…

 

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Bill allows tax-free use of retirement funds for mortgage payments

Bill allows tax-free use of retirement funds for mortgage payments.

This is interesting, a bill that would allow a homeowner to tap into their retirement funds without the normal 10% penalty to cover their mortgage payments.  Interesting how it is only for Fannie Mae and Freddie Mac  mortgages…

We will have to see if this bill becomes law.