Friday, January 17, 2014

Mortgage Rates After the Financial Crisis

Since the end of the financial crisis, the 30-year fixed-rate mortgage has maintained a gradual downward trend, dropping 88 basis points since June 2009, according to data gathered by Freddie Mac. Contrary to this trend, during the last 18 months, the rate has been gradually increasing. The largest weekly drop during the last 18 months was 18 basis points, compared with a maximum weekly drop of 44 basis points during the recession.

In June 2007, before the financial crisis, the 30-year mortgage rate was 6.74%, the highest rate in 2007. The rate fell to a low of 3.34% in January 2013. From January 2013 to December 2013, the rate increased 110 basis points, compared with a 60 basis point drop over the same timeframe in 2012. As of January 16, 2014, the 30-year fixed-rate mortgage is 4.41%.

The 15-year fixed-rate mortgage shows similar trends to that of the 30-year mortgage rate. After experiencing spikes during the financial crisis, the 15-year mortgage rate has also experienced a downward trend. In the second quarter of 2013 the 15-year mortgage rate jumped 80 basis points in three months. Since then, the rate has continued a more gradual rise; the largest weekly drop has been just 17 basis points, compared with a weekly drop of 42 basis points in October 2008.

From January 2013 to December 2013, the 15-year mortgage rate increased 80 basis points, compared with a 60 basis point decrease over the same timeframe in 2012. During the week of January 16, 2014, the weekly average of the 15-year fixed-rate mortgage decreased 11 basis point to 3.45%.

For more information, read the Freddie Mac report.


David Atkinson said...

This is my first time i visit here and I found so many interesting stuff in your blog especially it's discussion, thank you.
David Atkinson

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Over the last two years, we have seen absolute turmoil in the economies of every country in the world. It all started in the United States when the subprime mortgage crisis was kicked off in late 2007. The financial books of Bears Sterns illustrated just how bad the banking and financial industry was in the United States.

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