by dane

After falling for the last 2 months 30 year mortgage rates jumped up this week. The 30 year mortgage went from 5.10 to 5.25. This is the highest we have seen December 11, 2008. The 15 year mortgage moved up as well from 4.80 to 4.92. Below are rates for the last few weeks.Feb 05, 2008 30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

Jan 29, 2008 30-yr 5.10 15-yr 4.80 5-yr ARM 5.27 1-yr ARM 4.90

Jan 22, 2008 30-yr 5.12 15-yr 4.80 5-yr ARM 5.24 1-yr ARM 4.92

Jan 15, 2008 30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Jan 08, 2008 30-yr 5.01 15-yr 4.62 5-yr ARM 5.49 1-yr ARM 4.95

The 5 year arm and the 1 year arm for the most part held steady. The 5 year arm still remains a pointless mortgage option since it is above the 30 year rate. The 1 year rate is moving back to almost being a viable option. While the difference between the 1 year arm and the 30 year fixed is still not great enough to see many people choosing the 1 year arm, if the 30 year rate rises more next week I could see the 1 year arm starting to see more activity. In addition to looking at rates we wanted to also look at actual mortgage payments. We took today’s rates and determined what the mortgage payment would be on a 200k mortgage. We also did the same thing with rates from a week ago and rates from January 15th when rates hit their lowest point so far.

Feb 05 30-yr 1104.4 15-yr 1573.26 5-yr ARM 1105.64 1-yr ARM 1063.88

Jan 29 30-yr 1085.89 15-yr 1560.82 5-yr ARM 1106.88 1-yr ARM 1061.45

Jan 15 30-yr 1068.75 15-yr 1545.36 5-yr ARM 1104.4 1-yr ARM 1060.23

Compared to January 15th ones potential mortgage payment has risen about 3.2 percent. This is a decent rise for this short of a period of time.

So if you were planning on purchasing and didn’t lock in 3 weeks ago did you miss the boat? I would say yes and no. The rates 3 weeks ago were at 30 year lows and they have risen quite a bit since then. But looking over the last several decades today’s rates are still very very low.

It’s hard to know what is going to happen moving forward. Without direct government involvement I don’t see rates falling back to what we saw a few weeks ago. So that begs the question, are we ever going to see the proposed 4.5 government sponsored loan become a reality? The difficulty of passing the recent economic stimulus package makes it look like passing additional programs might be tough as well. And if it does pass there are probably going to be some strings attached. Currently I would peg the chance of it passing at around 50%. But if the housing market weakens this month I would think the prospects of a 4.5% government mortgage would rise substantially.

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