Historical Mortgage Rates – Are We Really at an All Time Low?
Posted on | September 2, 2009 | No Comments
In April of 1971 Freddie Mac started collecting mortgage rate data. The primary mortgage market survey (PMMS) surveys lenders each week on mortgage rates for the 30-year fixed-rate, 15-year fixed rate, 5/1 hybrid adjustable-rate, and the 1-year amortizing adjustable rate. The survey is based on mortgages with a loan-to-value of 80%. The only data point that has been collected every month since April of 1971 is the 30-year fixed-rate mortgage.
The survey data is collected from top lenders across the nation from Monday through Wednesday. The weekly results are posted on Thursday of each week and serve as the “foremost reliable, representative source of regional and national mortgage rate trends and is relied upon by the mortgage industry and the public in gauging market conditions and evaluating mortgage loan options.”
Last week they 30-year fixed-rate mortgage hit an new summer lows of 5.01%. In April of this year, the monthly average was exactly 4.81% and that was the lowest in the history of the survey. We are currently sitting very close at an all time low for mortgage rates but it is all relative due to the limited amount of data. Unfortunately, we do not have accurate data before 1971 so we can only analyze what we have.
With this knowledge, one must ask the question, “Why is the housing market still so bad if mortgage rates are so low?” As I have said many times, mortgage rates could be at 0% and if Americans don’t have money to make monthly payments it is not going to matter. To make monthly mortgage payments you must have some source of income, this is not rocket science. With unemployment climbing towards 10% nationally where is this source of income going to come from for home owners?
Author: Tiffany Mann
Tags: historical mortgage rates > monthly mortgage payments > mortgage industry > mortgage loan options
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