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Mortgage Rates - May 2011

USDA Guaranteed Rural Housing informationMortgage rates dipped to their lowest levels of 2011 on the Thursday and Friday before Memorial Day, and are now at the lowest levels since November 2010.  As home prices remain under pressure due to an ample supply of sellers, there is now an affordability trifecta of sorts:  Lower Rates, Lower Home Prices, and Lots of Inventory to Choose from.  The buying season is in full swing in Asheville, NC, and all price ranges are seeing nice activity.  100% financing is still available via the USDA Guaranteed Rural Housing mortgage program.  Rates are lower than market for USDA and FHA loan programs because of the government guarantee offered to lenders.  Plus, about half of Buncombe County and ALL of the surrounding counties are eligibile for USDA financing.  NOTE that specific property eligibility should be researched and that I'm happy to be a resource should anyone have questions.  In addition, adjusted income eligibility limits for the USDA Guaranteed RH loan program goes all the way to $74,050 for a 1-4 person household, and up to $97,750 for a 5-8 person household.  Changes to this program are set to begin in Oct. 2011.  What changes do you think should occur and why? 
  • May 29 2011 - Asheville
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Answers (7)

Good info Eric.  I have some additional data for both buyers and sellers.  The current interest rate is very low as you pointed out but I do not think most people are aware of exactly how low or how much impact the reverse will be.  According to Freddie Mac the average annual interest rate for the years 1971 to 2010 is 9%.  Current rates are at least 4% below that average.  I believe interest rates will either lead or follow an increase in property values.  As the demand for financing increases so will the interest rates.  A 3% increase on a X1-IAc1bo9yqclocx_gfdaq00,000 loan increases the payments Good info Eric.  I have some additional data for both buyers and sellers.  The current interest rate is very low as you pointed out but I do not think most people are aware of exactly how low or how much impact the reverse will be.  According to Freddie Mac the average annual interest rate for the years 1971 to 2010 is 9%.  Current rates are at least 4% below that average.  I believe interest rates will either lead or follow an increase in property values.  As the demand for financing increases so will the interest rates.  A 3% increase on a $200,000 loan increases the payments $155,000 over the life of the loan.  Most buyers would need to earn an EXTRA $200,000 in order to make the extra payments. Here is a rate chart I prepared:


  • May 30 2011
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Profile picture for Carol Namath
Guys, I hate to seem unappreciative, but some of us would like to see pictures that are fun.  Those graphs are really boring, and while I am sure that you are all VERY smart...I could not bear to read all the lengthy "stuff" that you took the time to write down.

When we consumers want to know what time it is, we really don't want to know how to build a clock.
  • May 30 2011
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Profile picture for wetdawgs
Thank you both for the graphs.   We consumers appreciate being treated as if we have brains (because we do and we do understand!)

@ Carol:  Thank goodness some lenders and agents share data.   The "trust me" agents and lenders are fired by the dawgs within seconds.
  • May 30 2011
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Profile picture for WolfTrap
A big thanks for the info.

A question for the agents: You note that interest rates are low, and below general market rates since the USDA loans are guaranteed.

What do those rates look like on a nationwide average would say?

I see perhaps 5 percent. But why, then, when I go to a banking website do I find rate examples of, say, 3.9 percent? Event he APR are in the 4.75 range.

Am I missing something?
  • August 21 2011
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Good information posted.  Thank you
  • August 22 2011
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Profile picture for Sharon Lewis
Great information for the consumer, thanks for taking the time to put it here
  • August 23 2011
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3 posts about how great information on May 2011 rates is.

What am I missing here?

"Great information for the consumer, thanks for taking the time to put it here"

Really? Please elaborate on why it's great.
  • August 23 2011
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