Mortgage Rate Update 5/17/10

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The biggest economic news this week was that the EU will provide a much larger aid package than previously announced. On Monday, this news caused investors to move funds to riskier assets and out of safer investments such as bonds. This week’s economic data contained few surprises. Later in the week, successful results for the long-term Treasury auctions helped bond markets, and mortgage rates ended the week near the lowest levels of the year.

Monday, the EU and the IMF surprised investors with the announcement that they will make available up to $1 trillion to support Greece and other EU members which are experiencing economic troubles. This enormous amount of aid demonstrates the commitment of the stronger European countries to maintaining the European Union and allowing the weaker countries time to recover. The Euro currency strengthened against the dollar and other currencies, and global stock markets rallied strongly. Mortgage markets were hurt by the news when investors reversed the flight to safety trade and moved funds back into riskier assets such as stocks.

March Pending Home Sales increased 5.3% from February, and were 21% higher than one year ago at this time. The Pending Home Sales index, which measure sales of existing homes based on contracts which have been signed but not yet closed, is a leading indicator for the housing sector. The index provides guidance for future Existing Home Sales reports. The chief economist of the National Association of Realtors (NAR) suggested that the home buyer tax credit has helped “stabilize the market”. Contracts had to be signed by the end of April to qualify for the tax credit, so many buyers rushed to take advantage before the deadline. As a result, the NAR chief economist expects “measurably lower sales” in May. The growth in housing sector activity will then depend largely on the performance of the economy and the labor market. The housing sector may also benefit from increased availability of jumbo mortgages and other forms of credit from non-governmental sources.

For expert assistance with your financing needs, call Michele Poulin, Retail Sales Manager at Wells Fargo, (203) 440-3745.

Here are this week’s rates:

Monday, May 17th, 2010

All rate quotes are for a 60-day lock with 0 points and a 720 FICO score.

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

30 yr conforming fixed: rate = 4.875% APR = 5.065%

15 yr conforming fixed: rate = 4.250% APR = 4.573%

5/1 yr conforming FHA ARM: rate = 3.375% APR = 3.208%

5/1 yr conforming ARM: rate = 3.375% APR = 3.5549%

30 yr FHA Fixed : rate = 4.875 APR = 5.630%

30 yr CHFA w/ 1 pt : rate = 4.375% APR = (see below)

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CHFA (Connecticut Housing Finance Authority) rates for the week of May 13 – 19 , 2010

Homebuyer Mortgage Plan:

Interest rate: 4.375 % (APR range 4.475 – 4.875%)

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: 4.375 % (APR range 4.475 – 4.875%)

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 Harriman Real Estate LLC and Wells Fargo Home 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 .

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Comments

  1. Bill Fulton

    Its funny, I read this week that Greece has a GDP equal to that of Phildelphia. In and of itself it souldn’t be an issue, but it can be looked at as a leading indicator for other EU countries as well as some of our United States. What I took note of was the demonstrations in Greece. We will have to see some of the same austerity measures here in the shomewhat near future as they are implimenting now. Will Americans be takinng to the street en masse?

  2. Post
    Author
    Harriman Real Estate

    That’s a good question, Bill. Sometimes I think we should, but have we become so jaded and apathetic as a nation that nothing will pry us out of our recliners? And if we did, what would be the reaction from Washington? Indifference? Action? Martial law? I’m almost afraid to find out…

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