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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (3603)	7/26/2002 9:28:26 AM
From: nextrade!	Read Replies (1) \| Respond to of 306849

Lock 'em !?! <G> Mortgage rates reach 31-year low 30-year average of 6.34% could spur refinancing boom rockymountainnews.com By John Rebchook, Rocky Mountain News July 26, 2002 Rates for 30-year mortgages dipped this week to the lowest level in 31 years of record keeping, which is expected to ignite a refinancing boom in Denver and across the country. The average 30-year mortgage was 6.34 percent, according to a report released Thursday by Freddie Mac. That was the lowest rate since the agency that buys mortgages on the secondary market began tracking mortgage rates 31 years ago. The previous record low for 30-year mortgages was 6.45 percent, reached in early November. Mortgage rates 30-year: 6.34% 15-year: 5.75% ARM: 4.31% Last year, 30-year mortgages averaged 7.03 percent. The average 15-year mortgage this week dropped to 5.75 percent, the lowest since tracking began in 1991. "We're going a million miles per hour trying to close and lock in these rates," said Jay Wilson, state manager for National City Mortgage. "You can get a rate of 5 percent or below that is locked in for five years," Wilson said. "That's pretty hard to pass up, especially if you don't think you'll be in your house for more than five years." Low rates are helping to keep the housing market stable and leading to brisk mortgage refinancing activity, economists said. "While the . . . boom had softened earlier this year, low interest rates the last five weeks have rekindled a stronger refinance wave not seen since last year," said Phil Colling, an economist with the Mortgage Bankers Association of America. "At the current record low mortgage rates, it is possible that some people who had refinanced earlier at a higher rate are now refinancing again." But the refinancing boom may not be as strong as previous ones. That's because many homeowners already have refinanced at low rates and thousands of people who have lost jobs can't meet the income requirements to refinance, said mortgage lenders and Chris Holbert, executive director of the Colorado Mortgage Lenders Association. Despite the low fixed-rate loans, a lot of people are choosing "hybrid" adjustable rate mortgages with even lower rates, he said. On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 4.31 percent, down from 4.50 percent the previous week. At this time last year, one-year ARMs averaged 5.72 percent. This week's rate was the lowest since early 1994. These rates do not include add-on fees known as points. Fewer people are taking money out of their homes than in the past, Holbert said. And many people who do are getting lines of credit, some with rates around 3.3 percent for the first six months. "They can use that as a 10-year spigot to tap the equity in their homes," he said. "They get a loan, pay it off, and get another one." Some people who have loans at about 7 percent are refinancing, he said. "And we had one guy who still has an interest rate of 8.25 percent," he said. "We thought all of those guys already had refinanced, but there are still some out there." De Wayne Perry, principal of D.W. Perry & Co., said more people will be seeking to refinance when they learn how low rates are. "I don't think the news has really gotten out yet," Perry said. "Unfortunately, those who lost their jobs recently or are unemployed, won't be able to take advantage of the low rates." Holbert said many people don't realize that loans can go up as quickly as they come down. "Mortgage interest rates change every minute, just like stocks," he said.

To: nextrade! who wrote (3603)	7/26/2002 4:18:09 PM
From: MSI	Respond to of 306849

A personal anecdote on this issue: a young couple w. two kids, and 1-1/2 average incomes, lots of debt and no savings, has just decided to buy a 5,000 sf new home... This flabbergasts me and my wife, who know them well. They are just making ends meet, and are "social climbing", I guess. Either that or we boomers are getting conservative in our old age. It's amazing that with all the hew and cry over the market, economy, politics, war, and all the rest, these young couples are buying bigger homes at the very limit of their buying capacity. Has the "golden age" of overheated 1999 prosperity has given everyone vast expectations ?