· Conforming rates ended in 2008 at the lowest levels since Freddie Mac started tracking them in 1971. They plunged 1.3 percent since late October—On a average loan of 200K that is a savings of 170.00 a month!
· No one knows how fast or how far rates may go down. The Fed's initial announcement at Thanksgiving knocked rates down here, into the low fives, but waves of refis impede further declines.
· Mortgage rates today for a 417K for 30 year fixed loan amount and under are currently at 5.25% no points and 4.875% at 1 point
· Rates for 417-546,250 for a 30 year fixed are 5.25at no points and 4.875 at 1 point.
· Conforming mortgage rates ended 2008 at the lowest levels in decades. One reason is that inflation is not a concern right now due to the current economic weakness and the decline in energy prices. In addition, the Fed has begun to purchase mortgage-backed securities (MBS), increasing the demand. Mortgage rates are generally determined by the price of MBS. On November 25, the Fed announced a plan to purchase as much as $500 billion in MBS, and mortgage rates have dropped significantly since the announcement. They started Purchasing this am- January 4th- Low inflation and Fed purchases of MBS are expected to continue in coming months. Along with low mortgage rates, homes have reached their best level of affordability in many years, according to the National Association of Home Builders (NAHB). The NAHB index compares the cost of paying for a home, based on average home prices and mortgage rates, to the median household income. Increased affordability allows more people to participate in the housing market, which should boost demand for new and existing homes.
· The consensus outlook is that the economy will begin to improve during 2009. In addition, both the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) expect the housing market to improve next year. The NAR predicts that both the number of existing home sales and home prices will increase in 2009. The combination of a rebounding economy, low mortgage rates, and affordable home prices provides good reason to expect an improved housing market in 2009.
