Mortgage Rate Update 9/18/09

by Harriman Real Estate on September 19, 2009

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A wide range of major economic data released during the week and comments from the Fed reinforced the consensus outlook for the economy. Economic growth appears to be on track for gradual improvement, while inflation is not a concern in the short-term. With few surprises this week (jumbo loan rates decreased slightly), mortgage rates ended the week nearly unchanged.

The economy is currently experiencing moderate economic growth with low inflation. In a speech on Tuesday, Fed Chief Bernanke indicated that the recession is “very likely over”. Retail Sales and Industrial Production showed nice increases this week. Housing Starts, Building Permits, and Homebuilder Sentiment also moved higher. Meanwhile, there have been few signs of inflation in the short-term. For example, Core CPI rose at a modest 1.4% annual rate, the lowest annual rate since February 2004. Tame inflation readings have helped mortgage rates stay at low levels.

Recently, the Fed has been purchasing about $25 billion of mortgage-backed securities (MBS) each week, which represents a very high percentage of the average new issues. At this pace, the Fed will purchase the entire $1.25 trillion authorized for the program by the end of the year, when it’s currently scheduled to discontinue its MBS purchases. On Wednesday, at the conclusion of next week’s Fed meeting, investors will be hoping to receive an update on the MBS purchase program. The majority outlook is that the Fed will purchase the full $1.25 trillion and end the program, possibly by gradually reducing the level of weekly purchases and extending them into next year. Still, a significant number of investors expect the Fed to increase the limit, while others think the Fed will end the program early. Since mortgage rates are largely determined by MBS prices, changes in the level of demand from the Fed could have a large impact.

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, September 18th, 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 = 5.226%

15 yr conforming fixed: rate = 4.500% APR = 4.722%

7/1 yr conforming ARM: rate = 5.125% APR = 5.425%

5/1 yr conforming ARM: rate = 4.500% APR = 5.014%

30 yr FHA Fixed : rate = 5.000% APR = 5.205%

30 yr CHFA w/ 1 pt : rate = 4.750% APR = 5.033%

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

30 yr jumbo fixed: rate = 5.625% APR = 6.022%

15 yr jumbo fixed: rate = 5.250% APR = 5.725%

7/1 yr jumbo ARM: rate = 5.000% APR =5.405%

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CHFA (Connecticut Housing Finance Authority) rates for the week of September 17 – 23, 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 $200 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