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UPDATE: Please see this post for an updated chart (through Dec 2007) plus new charts!
“We’ve got to refinance NOW, rates are going up!”
“If we don’t buy now, we may not be able to get a good rate!”
I hear comments like this all the time.
Chasing mortgage rates will drive you bonkers. Yes, the rates for 30 year fixed rate mortages are inching up. But keep this in mind… they are coming up from historical lows. Today’s rates are some of the lowest ever. If you concern yourself too much about locking into the lowest rate you’ll ever see in your lifetime, then you’ll never get anything done.The chart below shows the rate of a 30 year fixed mortgage since 1971. Note where we are today compared to the other 35 years this chart reflects.
Is now a good time to convert that ARM to a fixed rate mortgage? Maybe. Maybe not. Rate isn’t the only factor to consider in a refi. How long you plan to live in your home, closing costs, your personal and professional situation, all this and more should be considered. Consult a loan officer, CPA and real estate professional in order to consider ALL your options. Rates are important, but they aren’t everything.
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{ 6 comments… read them below or add one }
Jim Duncan 09.11.06 at 1:11 pm
hmmm … so interest rates aren’t high right now?
Mind if I use this picture with a link?
–Jim
Beau Betts 09.11.06 at 1:15 pm
This definitely puts the interest rate question in perspective!
Jay T. 09.11.06 at 3:04 pm
Jim (and others) - Feel free to link to the chart. I am also happy to send anyone the Excel spreadsheet with the data and chart. Just email me: jay AT thompsonsrealty.com if you are interested. I probably won’t be able to get it out until later this evening.
real estate blogger 07.04.07 at 9:50 pm
Ask for a good home loan mortgage rate quote first before jumping into any refinancing scheme.
Mike 01.01.08 at 2:34 pm
Charts are helpful. There are things that should be considered when looking at charts. An example: looking at the charts movement from 1973 to 1981 there is exceptional movement to the up side. In this period of time OIL was going up radically & AMERICAN workers could demand higher pay to compensate.
From 1981 to 2007 there is big movement to the downside, it would appear, caused by lower wages. 1980 Reagan the signed amnesty for millions of illegals and symbolically busted unions, driving down wages ever since. With PRODUCTIVE jobs going to China & India it seems that wages will not be a problem.
Since oil & wages probably caused interest rates to rise from 1973 to 1981, it beg’s the question, what will happen from here? Using the chart & history as a measure I’d say interest rates will be going down. Low paid labor force equals low interest rates in my estimation. There are other details but not enough space to discuse them.
Thanks for the chart.
Jayson 01.18.08 at 2:32 pm
I definitely agree about interest rates not being anything. A friend of mine wants to refinance their home every time they watch the news and never take
the cost of refinancing into consideration. If they don’t plan on staying a while and are going to refinance next time they watch the news they’ll most likely end up losing money on the deal.