With the end of the first quarter of 2007 upon us this coming weekend, many homeowners in America with adjustable rate mortgages will be examining their home mortgage interest rates wondering whether or not know is the time to be moving into fixed rate mortgages to tie-up their interest rate for a while. Many believe the current problems in the sub-prime mortgage sector are going to have some effect on home mortgage rates across the industry in the coming months. Nevertheless, according to a recent survey undertaken by Bankrate.com, as many as 34 per cent of homeowners who have adjustable rate mortgages were still unsure at this time whether or not they would stick with the product they have or whether now was the time to get off the side-lines and move into one of the fixed rate home mortgage rate options available. Which means the most important question hanging at the end of the first quarter of 2007: are you sticking with your 5-year ARM?
In what is developing into a flat period for home mortgages rate, homeowners should not be surprised to hear that Atlanta mortgage rates remained fairly static over the past week.
According to Bankrate.com’s national survey of large lenders, benchmark 30-year fixed rate mortgages faired worse over the past week, with a small rise of 3 basis points week-on-week, rising from last week’s 6.19 per cent. to end this week at 6.22 per cent. 15-year fixed rate mortgage rates saw a very small fall of 1 basis point, to end the week at 5.92 per cent. 5-year adjustable rate mortgage (“ARM”) rates faired best over the past week, falling 3 basis points to see out the week at 6.05 per cent. One basis point equals one-hundredth of one percentage point.
Although week-on-week figures have reflected small rises and drops of the past month, month-on-month Atlanta mortgage rates have remained fairly stable over the first quarter of 2007. Given the current rumblings about problems in the sub-prime mortgage industry, those homeowners with prime rate home mortgages, which is what the Bankrate.com’s national survey of large lenders tracks, may feel that current trends in the home mortgage sector are doing better than could be expected.
If you’ve been following events on Capitol Hill in the last few days you may well be wondering what all the fuss is about ARMs and why, having been so lauded when in office, Alan Greenspan now seems to be squarely in the line of fire? Essentially, the problems surrounding ARMs centre on the interest rate deals that were given to borrowers in between 2004 and 2006, many of which are now seeing the end of their promotional periods. As many American homeowners who took up the offer are experiencing substantial (comparative) rises in interests, a number of home mortgage loan repayments are seeing defaults.
Coincidentally, the proceedings on Capitol Hill were instigated out of concerns centering around sub-prime mortgage lending, but those with sub-prime ARMs during this period will be experiencing a lesser rise in their interest rates as a result of having to have paid higher rates on their sub-prime ARMs.
While the concerns with keeping a careful eye on foreclosed ARMs is a noble venture, many industry experts are questioning whether or not we’re rather over cooking the concern issue here. So far there appears to be no immediate concerns that mortgage rates are rising beyond homeowners capabilities and in the last week figures have been released which show clear evidence that the housing market in America rebounded from its slow start in January.
Nevertheless, while those with ARMs taken out circa 2004 may well wish to track developments carefully, the rest of the American home sector should be weary of over-hyping the issues at the moment for fear we may actually create our own negative spiral merely by holding such thoughts.
Atlanta mortgage rates recorded only their second week-on-week rise since January with the end of the fall in interest rates that was experienced this past week.
According to Bankrate.com’s national survey of large lenders, Atlanta mortgage rates inched up marginally across the board. 15-year fixed rate mortgage rates faired best, but only managed to hold steady week-on-week at 5.93 percent. 30-year fixed rate mortgage rates saw a 3 basis point jump from 6.16 percent last week to end this week at 6.19 percent. 5-year adjustable rate mortgage (ARMs) rates took the hit this week, rising 4 basis points to end the week at 6.08 percent. A basis point is one-hundredth of one percent.
Atlanta mortgage rates remain under the psychologically important threshold of 6 percent, meaning that all is not doom and gloom in the American home mortgage market just yet. Moreover, with all the fuss that has been prevailing in Congress and elsewhere over the last few week in relation to sub-prime lending, its little surprise that a small correction took place with Atlanta mortgage rates over the past few days.
In a week where many American homeowners may be forgive for thinking that the bottom had fallen out of the US housing market, Atlanta mortgage rates offered some surprisingly good news.
According Bankrate.com’s national survey of large lenders, Atlanta mortgage rates recorded drops in both 30-year and 15-year fixed rate mortgages for the fourth straight week. 30-year fixed rate mortgage rates saw the largest week-on-week fall, going from 6.19 percent last week to 6.16 percent this week. 15-year fixed rate mortgage rates also saw a nice week-on-week fall of two basis points, from 5.95 percent last week to 5.93 percent this week.
For those who have 5-year adjustable rate mortgages (ARMs), the week ended out with no recorded change from last week, at 6.04 percent.
Although news items relating to record levels of foreclosure in Q4 2006, and troubles within the sub-prime lending housing market do appear to have taken the headlines over the last week, it is certainly worth noting that in prime lending market, which is what we monitor, the rates both year-on-year and month-on-month are much healthier today! It may be hard to visualize, but last year we were all excited that average 30-year fixed rate Atlanta mortgage rates were in the area of 6.43 percent. Even as little as 4 weeks ago the rates were 16 basis points higher than they are today.
All of which goes to show that while American homeowners should certainly be keeping an eye on what is happening in the areas of foreclosure and sub-prime lending, as a general rule we should not be hitting the panic buttons and thinking that the bottom is falling out of the housing market; especially when trends within Atlanta mortgage rates certainly seem to be telling us a different story.
