Mortgage Rate Update 10/23/09

There were few major surprises in the economic news this week, and little change in the stock market. While there was a great deal of daily volatility, mortgage rates ended the week unchanged.

A flood of housing market data was released during the week, and most of it reflected improvement in the sector. The biggest unexpected news came from the September Existing Home Sales report, which jumped 9% from August to the highest level since July 2007. Inventories of unsold existing homes dropped sharply to a 7.8-month supply from a 9.3-month supply in August. This marked the lowest inventory levels in two and one-half years. September Housing Starts remained at depressed levels, which removes pressure on future inventory levels. Building Permits, a leading indicator, also held at low levels. In short, home sales improved, while inventory levels moved lower with a relatively light supply of new homes in coming months. If there is a note of caution, though, it’s that much of the activity has been spurred by exceptionally low mortgage rates and the first-time homebuyer tax credit, and the future is uncertain on both fronts. The Fed is scaling back its purchases of mortgage-backed securities, which might push mortgage rates gradually higher, and lawmakers are currently debating whether to extend the first-time homebuyer tax credit.

The Mortgage Bankers Association (MBA) also released its forecasts for this year and next. According to the MBA projections, purchase originations will decline slightly in 2009, but will then increase by 12% in 2010. Similarly, the MBA forecasts that existing home sales will rise by 11% in 2010. The chief economist of the MBA suggested that the timing of the economic recovery and the level of mortgage rates are the biggest variables influencing the results for 2010.

For expert assistance with your financing needs, call our in-house mortgage executive, Rick Cannavaro, at (203) 672-2706.

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Here are this week’s rates:

Friday, October 23rd, 2009

All rate quotes are for a 60-day lock with 0 points, 5% down payment, and a 720 FICO score.

Conforming limits are up to a $417,000 loan limit*

30 yr conforming fixed: rate = 5.000% APR = 5.282%

15 yr conforming fixed: rate = 4.750% APR = 4.954%

7/1 yr conforming ARM: rate = 4.875% APR = 5.225%

5/1 yr conforming ARM: rate = 4.375% APR = 4.614%

30 yr FHA Fixed : rate = 5.000 APR = 5.345%

30 yr CHFA w/ 1 pt : rate = 4.750% APR = 5.293%

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Jumbo loan limits range from $417,001 to $1,000,000*

30 yr jumbo fixed: rate = 5.375% APR = 5.652%

15 yr jumbo fixed: rate = 5.000% APR = 5.317%

7/1 yr jumbo ARM: rate = 4.875% APR =5.225%

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CHFA (Connecticut Housing Finance Authority) rates for the week of October 22 – 28 , 2009

Homebuyer Mortgage Plan:
Interest rate: 4.750 % (APR range 4.850 – 5.250%)
Fees: Up to One Point (1% Origination Fee) * Payable to Lender
Term – 30 years, fixed rate

Downpayment Assistance Program (DAP)
(Rate listed is for DAP loans with Homebuyer Mortgage Program financing.)

Interest rate: 4.750 % (APR range 4.850 – 5.250%)
Fees: Up to $2000 Application Fee * Payable to Lender
Term – 30 years, fixed rate

(NOTE: If at any time the interest rate for the Homebuyer Mortgage Program exceeds 6%, the DAP interest rate will be capped at 6%.)

* Additional fees may apply

*Conforming loan limits listed above are for a single-family owner occupied residence.
Courtesy of The Harriman Team and William Raveis Mortgage

*All rates are subject to change. Minimum down payment and credit score requirements may apply. All information provided is deemed reliable but is not guaranteed and should be independently verified .

William Raveis Real Estate, 465 S. Main St., Cheshire, CT 06410

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