Today’s FHA Interest Rates v. November’s

Filed under FHA Interest Rate by on February 25, 2011 at 7:13 am {no comments}

FHA interest rates don’t exactly follow the Freddie Mac  results, but they’re close enough that we can use them for comparison.

Yesterday’s survey had the 30 Year Fixed at 4.95% and had it at 4.30% back in November.

If you look at that on a normal FHA loan, 3.5% down, the payment difference is fairly signficant for it only being four months ago.  We’ve used a $300,000 price, a $289,500 base loan amount.

Using those interest rates, it’s a $113/month difference.  That’s a whopping $18,940 in the first 10 years. 

So, for FHA interest predictions does it make sense to wait for rates to come back down?  No.  It’s a lot more likely that rates are heading higher, not lower. 

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FHA Interest Rates: Predictions week of May 17, 2010

Filed under Weekly Review by on May 17, 2010 at 7:53 am {no comments}

CPI could move FHA interest rates rates improved again last week.  That’s three weeks in a row.  That’s back to 2010 lows.  That’s back to the levels we saw in February and March right before they jumped.

We start this week with nearly all FHA borrowers looking at sub-5% rates, no points.

If you are seeing any of the following, click the chat button, we can help:

  • 5% or higher rates
  • Points
  • Lender costs over $1,000

The FHA loan rate has been helped, significantly, by the mess in Greece and Europe.  Investors everywhere have pulled money out of the eurozone and plugged it into our markets.  More foreign money = lower home .

That’s good.  But that could end at any moment.  That’s risk #1.

Risk #2 to mortgage rates this week is the economic calendar.  It is loaded.

  • Housing:  Home Builder Housing Market Index, Building Permits, Housing Starts
  • Inflation:  &

Oh, and it is also the week of the release of the Fed minutes from the April meeting.  That’s always a market mover and happens in addition to some other highly influential reports.

have been here before.  Never in history have they stayed here for long.  If you’re undecided whether to lock or float, you stand to gain very little by waiting, but could lose .5% in the blink of an eye.

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FHA Interest Rates Respond to Fed Meeting

Filed under FOMC by on March 16, 2010 at 1:32 pm {no comments}

The Fed’s Open Market Committed left rates unchanged.  The 9-1 vote leaves the at 0.000-0.250%.

In its press release, the highlights were three-fold:

  1. Economy:  “has continued to strengthen”
  2. Jobs Market:  “is stabilizing”
  3. Business Spending: “has risen significantly”.

This is six meetings in a row with an optimistic outlook.  The 2008-2009 recession is slowly going away and the economy is growing.  It’s not perfect and the economy still has threats:

  1. High unemployment threatens consumer spending
  2. Housing starts are at a “depressed level”
  3. Consumer credit remains tight

The overall tone was positive inflation is within limits.  We don’t have another Fed meeting until April 27-28.

responded positively to the news and we avoided a massive sell-off that would have pushed loan rates higher.

The next big looming threat is the end of the $1.25 trillion commitment to the mortgage market by March 31, 2010. Fed insiders estimate that the bond-buying program lowered by 1 percent since its start.

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2010 FHA Mortgage Rate Predictions? Try Guesses.

Filed under Weekly Review by on February 8, 2010 at 7:46 am {no comments}

All bets are off.  There are some things that “always” increase rates.  Last week, we saw strong corporate earnings, housing appears stable, and the Federal Reserve continues their upbeat tone.

Those things all cause rates to go up.  Yet, the FHA interest rate dipped for a 4th consecutive week.

Why?  Because every other economy in the globe appears worse off than ours right now.  Bad news kept filtering in, starting with the UK banks the week prior, China tightened its money supply, and pick an EU country, it’s in trouble.

The rate is strongly tied to where global investors wish to park their money.  For the past two weeks, the U.S. has seemed much safer than anywhere else.  When investors park their money here, our go down.

Looking forward to this week’s predictions, there is almost no economic data.  If foreign investors deem the U.S. safer than elsewhere, FHA rates stay low.  If foreign investors think someone else offers a risk/reward they like, the sound will be their money sucking out of the bond market and the consequence will be a significant jump in mortgage rates.

If you are currently considering whether to lock or float a laon, the trend continues to point towards higher rates down the road.

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FHA Loan Rates Moving Higher

Filed under FHA Interest Rate by on December 24, 2009 at 4:09 am {no comments}

have been under pretty heavy selling pressure for the past month.  What this has done is drive the benchmark 30 year fixed rate up to about 5% today.

What we’re looking at is the graph of the Fannie Mae 4.5% bond, but the Ginnie Mae’s that drive the rate have followed the same path.  This is the price of the bond, the rate moves in the opposite direction.  So, in this graph, red is bad for and green is good.

It’s very clear that this month has been dominated by bad movement in terms of mortgage rates.

The 2010 predictions point towards a continued trend towards higher rates.  I’ve seen argument for rates ranging from 5.5% to 6.5%.  The case being made for the 6.5% folks is technically sound reasoning, but I think it presses the edge of the high side.  Similarly, that 5.5% guess is probably low.  These estimates foreast the FHA interest rate rising anywhere from .5% to 1.5%.  It is probably safe to split the difference and become prepared for a 6% rate environment and about a 1% increase from today’s levels.

What does that mean for a home buyer?  Get moving and get moving quickly.  The home supply is rapidly selling off.  That, more than any other single factor, influences home prices.

They’re not getting cheaper.  If home prices are going to be the same or higher and mortgage rates are going to be higher, possibly much higher, the housing payment for the exact same home could be 10% higher by March.

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