Why & How to Look at a Historical Mortgage Chart
Consumers say it is a seller’s market, but buyers are scoring epic interest rates.
A couple weeks ago, Fannie Mae released a report on monthly updates to its Home Purchase Sentiment Index (HPSI). While the report might suggest it’s a bad idea to buy right now, that does not take into account the savings homeowners can land on their mortgage rates.
When you look at a historical mortgage chart, you can understand why it makes sense to buy or refinance today.
Fannie Mae: Consumers uneasy about buying
The report showed that the perception that it’s better to buy than to sell is spiking:
While 67 percent of consumers said it was a good market for sellers in June, 77 percent said the same in July; and
While 64 percent of consumers said it was a good market for buyers in June, only 56 percent said the same in July.
Argument for buying/refinancing: Interest rates are insane
What current consumer sentiment is taking into account is the price of homes. Prices have remained high during the pandemic because demand has stayed strong. However, the other trend during the pandemic has been absurdly low interest rates. Rates have dropped to record lows across 50+ years of tracking.
The rates fell most recently because borrowers are incurring lower costs from regulators. To cover COVID-related losses, Freddie Mac and Fannie Mae had been charging 50-basis-point fees per loan to lenders. The Mortgage Bankers Association noted that refinancing applications had risen in the early part of July and were expected to increase further thanks to this federal change.
As of this week, per the Freddie Mac Primary Mortgage Market Survey (PMMS):
The 15-year fixed-rate mortgage (FRM) average was 2.12%, an ALL-TIME RECORD LOW.
The 30-year FRM was at 2.78%, near its all-time record low of 2.65%.
At 2.49%, the 5/1 adjustable-rate mortgage (ARM) is just slightly up from the ALL-TIME RECORD LOW it achieved last week, 2.47%.
How to look at a historical mortgage chart
Here are the steps to see how amazing the rates are:
Look at the PMMS chart on the Freddie Mac website.
In the numbers at the top, you can see that blue, green, and red are associated with the three different loan types in the graph. You can also see the year-over-year changes to each loan, which are well down for all three types.
Then next to “Zoom,” you will see the option to expand the time charted. Look at 5 Years, 10 Years, and All. It should be clear when you do that how ridiculous the current interest rates really are.
Getting your best rate
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