{"id":18382,"date":"2010-07-11T19:29:08","date_gmt":"2010-07-11T23:29:08","guid":{"rendered":"https:\/\/louisvillehomesblog.com\/?p=1506"},"modified":"2023-09-02T14:34:23","modified_gmt":"2023-09-02T14:34:23","slug":"mortgage-rates-lowest-in-40-years","status":"publish","type":"post","link":"https:\/\/trepryor.com\/blog\/mortgage-rates-lowest-in-40-years\/","title":{"rendered":"Mortgage Rates Lowest in 40 Years"},"content":{"rendered":"\n

As in life, there’s good news and there’s bad news. Looking at our Louisville real estate home values and number of sales, we see that 2010 is a big improvement over 2009. That’s good news! But 2009 wasn’t a very good year, to begin with. That’s bad news. But now mortgage rates are at their lowest levels in 40 years.<\/p>\n\n\n\n

\"Chart:<\/figure>\n\n\n\n\n\n\n\n

Many economists today have serious concerns over where our economy is heading with government spending on the rise and our deficit growing. That’s bad news. So where’s the counter-balancing good news? Mortgage rates!<\/p>\n\n\n\n

Rather than plaster row upon row of 30-year fixed mortgage rate data on this site, wouldn’t you much rather look at some charts? First comes the recent past\u2014here are the rates from the past 3 months.<\/p>\n\n\n\n

Charts of Mortgage Rates: United States<\/h2>\n\n\n\n

Nothing earth-shattering in this 3-month chart but since May 6th the national average for 30-year fixed mortgages dropped below 5%. That’s pretty significant.<\/p>\n\n\n\n

\"Chart:
On this chart, we see a smooth steady decline for the three-month period.<\/figcaption><\/figure>\n\n\n\n

When we look back one year, we can see that most of the overall decline has occurred in just the past two months.<\/p>\n\n\n\n

\"hart:
Overall, the past year has remained relatively flat but since the high in early April, rates have moved consistently downward.<\/figcaption><\/figure>\n\n\n\n

Here we see that just as recently as 2000, interest rates were up around 8%. We’re now at almost 4% just a decade later.<\/p>\n\n\n\n

\"Chart:
Rates hit a significant low back in the first part of 2004 then rose back up. Since 2009, they’ve been even lower.<\/figcaption><\/figure>\n\n\n\n

This final chart really should give home buyers great enthusiasm. Rates aren’t likely to move much lower. Buying now could save a great deal of money over the term of the loan.<\/p>\n\n\n\n

\"Chart:
It’s quite remarkable to see where rates are today. It appears that there isn’t much room for them to go lower.<\/figcaption><\/figure>\n\n\n\n

Lower Rates Mean Lower Payments<\/h3>\n\n\n\n

Here in the United States, homebuyers used to contribute 20% down towards the purchase of their new home. This was primarily done in order to avoid the required private mortgage insurance (PMI). That number dropped to around 10% in 2003 according to Freddie Mac as more relaxed credit rules enticed more renters into homeownership with lower down-payment requirements.<\/p>\n\n\n

\n
\"Tom<\/figure>\n<\/div>\n\n\n

For our example, let’s say home buyer Tom<\/a> decides that he can wait until next year to purchase his new home. Since I can’t predict the future, let’s say rates only increase 1.5% from now until next Summer.<\/p>\n\n\n\n

Tom grabs his Realtor finds a great bachelor’s pad and buys it for $200,000. Tom’s interest rate at this time is 6% on a 30-year fixed mortgage. Using our trusty mortgage calculator<\/a>, we see that by putting down a whopping $40,000 to avoid PMI, the principal and interest portion of his mortgage is just $959.28. Sounds great, right?<\/p>\n\n\n\n

Tom’s close friend, Jerry, decided that now was the time to buy. His Realtor found an amazing condo close to great restaurants that he bought for the same price\u2014$200,000. The big difference is that Jerry’s current interest rate is just 4.5%. (A client of one of my mortgage broker friends just locked in on a rate of 4.125%.)<\/p>\n\n\n\n

With this scenario, Jerry’s P&I portion of his mortgage is just $810.70\u2014a difference of $148.58 a month! Over 30 years that’s $53,488.80. I guess that’s why Jerry always beats Tom in those cartoons.<\/p>\n\n\n\n

Please note that the data reflected in these charts are national averages<\/strong> so numbers for our Louisville real estate market<\/a> would be different.<\/p>\n","protected":false},"excerpt":{"rendered":"

As in life, there’s good news and there’s bad news. Looking at our Louisville real estate home values and number of sales, we see that 2010 is a big improvement over 2009. That’s good news! But 2009 wasn’t a very good year, to begin with. That’s bad news. But now mortgage rates are at their […]<\/p>\n","protected":false},"author":2,"featured_media":8846,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"off","ocean_gallery_id":[],"footnotes":""},"categories":[678],"tags":[1022],"class_list":["post-18382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-mortgage-rates-lowest-in-40-years","entry","has-media"],"_links":{"self":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/18382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/comments?post=18382"}],"version-history":[{"count":2,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/18382\/revisions"}],"predecessor-version":[{"id":21009,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/18382\/revisions\/21009"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/media\/8846"}],"wp:attachment":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/media?parent=18382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/categories?post=18382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/tags?post=18382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}