Posted on 06/22/2006 10:37:44 AM PDT by Hydroshock
WASHINGTON - Average interest rates on U.S. 30- and 15-year fixed rate mortgages reached four-year highs in the latest week, while rates on one-year adjustable rate mortgages rose to a level not seen since 2001, mortgage finance company Freddie Mac said on Thursday.
Rates on U.S. 30-year mortgages were at 6.71 percent, compared to 6.63 percent the previous week, a rate not seen since June 2002. Fifteen-year mortgages rose to an average of 6.36 percent from 6.25 percent. They were last higher in May 2002, at 6.37 percent. One-year adjustable rate mortgages also climbed to 5.75 percent from 5.66 percent, close to the 5.77 percent they reached in August 2001.
The rate spikes reflected market worries over how the Federal Reserve would respond to inflation pressures, said Frank Nothaft, Freddie Mac vice president and chief economist.
(Excerpt) Read more at msnbc.msn.com ...
Yes, but this still is not good.
The rise in interest rates are the primary factor in the slowdown in housing sales.
Of course, the chicken littles will still run around and claim the bubble is bursting. When rates go down again, activity will be back up.
The signs are that the fed will be raising rate next week and many think they are not done. I would not be suprised to see it keep going up for a while now. Translation if you are looking buy or refi in the next six months or so do it now.
True enough. My mortgage on my first house was like 10% and I was happy to have it.
The difference between then and now is that nobody in the world would have let me have that mortgage with no money down, a rate guaranteed to double after a year, and payment requirements approaching 75% of my take-home pay. That's the rule rather than the exception in many parts of the country today, which means that single financial hiccup is an immediate and irreversible path to foreclosure. That is the next shoe to drop.
The difference between then and now is that nobody in the world would have let me have that mortgage with no money down, a rate guaranteed to double after a year, and payment requirements approaching 75% of my take-home pay
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I suspect that if we went back to the old rules housing "affordability" would be at its lowest level in many many years.
22% as I recall, then there was that rule of 78 thing.
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