Although conforming mortgage rates have been fairly steady lately, 30 year fixed rates continue to decline even though they are already at record lows. Here's a graph of the Freddie Mac weekly survey of conforming mortgage rates to date in 2009:
Unusually, as you can see above, short term rates have been higher than long term rates. From the Freddie Mac press release accompanying the data:
"Although long-term mortgage rates eased slightly this week, ARM rates remain elevated relative to those fixed-rate mortgages," said Frank Nothaft, Freddie Mac vice president and chief economist. "For instance, interest rates for 1-year ARMs exceeded those for 30-year fixed-rate mortgages over the last two weeks; this is the first time this has happened since Freddie Mac began collecting data for ARMs in January 1984.
What about Jumbo mortgage rates?
Jumbo rates have been more volatile recently, in a good way, since they have been also edging down. From today's bankrate.com press release on the jumbo mortgage market:
"Mortgage rates have been comparatively tame in recent weeks, but one exception has been the jumbo mortgage market. Jumbo mortgages, those too large to be purchased or guaranteed by Fannie Mae and Freddie Mac, carry higher rates than smaller, conforming loans that do carry such guarantees. And since the onset of the credit crunch, the differential in rates has been significantly larger, well above 100 basis points [1% to you and me] instead of the typical pre-credit crunch level of 25 basis points [0.25%]. But jumbo mortgage rates have fallen to a two-year low of 6.52 percent, down from 6.76 percent two weeks ago and 6.99 percent on March 11. The rates are still higher than they would be in a normal credit environment, but with the slowly thawing credit markets the spread between conforming and jumbo rates has narrowed to levels last seen in Nov. 2008."
With more banks starting to offer jumbo loan products (as I wrote about in Jumbo mortgage loan rates may finally be coming down) the rates are becoming more competitive and are now at a 2 year low. Since the credit crisis began last fall, the high end real estate market in Boston (and in many other parts of the country) has been fairly dead in terms of activity but this is a hopeful sign that may lead that part of the market to pick up some steam. Since the sub-$500K Boston real estate market has been very active recently due to lower rates and tax credit incentives, we'll see if the same happens with the upper end if jumbo rates continue to fall.
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