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April 3, 2009

Mortgage rates: There's low, and then there's low

If you're thinking about refinancing, you're not alone. Lenders are seeing more applications for loans, and 80 percent of applicants want a refi, according to the Mortgage Bankers Association.

That's because mortgage rates are below 5 percent for 30-year fixed products. Freddie Mac, releasing its weekly survey Thursday, said it was 4.78 percent -- the lowest since it started tracking the figure in the spring of 1971.

You know, this is exactly the sort of situation that cries out for a graph.

Here you go:




The higher line is the annual average; the lower one is points. There's no 1971 (only a partial year of data from Freddie Mac) and no annual average to be had for '09 yet, obviously. But you can imagine the line dropping from '08.

I included points because they've ranged a lot over the years -- from more than 2 percent to less than half a percent.

I updated the graph above on 4/6 to show the rate and points separately -- which I should have done from the beginning. Desk, meet head.

Posted by Jamie Smith Hopkins at 8:11 AM | | Comments (4)
Categories: Mortgage rates


Mortgage rate in 1972 was 7%, not the 8% shown in the graph, with 0 points for 30 years. Bought my first house that year mortgaged through Provident Bank. Of course back than they did not sell their mortgages.
This is just another incorrect articule by a sloppy "I don't care" Media. The Media is a big part of the problem, and no help in the resolution.

According to the averages from Freddie Mac, the rate in 1972 was just under 7.4 percent with 0.9 percent in points. I rolled all points in with the interest rates over the years, trying to account for the fact that differences in points from year to year make a real difference in a borrower's bottom line.

Alas, it's not that simple: Most people pay points up front, and if you're financing them in, it raises the amount you're financing rather than the interest rate you're paying. When I get a spare non-diaper-changing moment, I'll redo the chart to show both the interest rate AND the points.

I try my very best not to be sloppy.

Speaking of incorrect and sloppy writing, this is a blog, not an "articule."

Mortgage rates are absolutely crazy right now. It is unbelievable how low they've gone.

I was considering selling in a year, but I may just refinance my mortgage and extend my stay. It's almost too good to be true.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie

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