Mortgage Rates Slide Again, Putting Pressure on Buyers
NEW YORK (TheStreet) -- Mortgage rates are falling fast again, and would-be buyers have to start thinking: Can I afford to wait six months to buy a home with interest rates this low?
And low they are, as evidenced by a slew of mortgage rate data out early this week.
First up is the BankingMyWay Weekly Mortgage Rate tracker, which shows 30-year fixed mortgage rates sliding from 4.40% last week to 4.21% this week.
One-, three- and five-year adjustable-rate mortgages are also in full retreat this week, with the benchmark three-year ARM rate falling from 3.46% to 2.85%.says Frank Nothaft, vice president and chief economist, at Freddie Mac. He notes the U.S. pending home sales index declined by 8.7% in December, to its lowest level since October 2011. "Fixed residential investment negatively contributed to GDP in the fourth quarter for the first time since the third quarter of 2010," he says. "Also, the Institute for Supply Management reported a significant slowing in growth in the manufacturing industry in December than the market consensus forecast." KeepCurrentMatters.com seeing rates climbing to 6% by year-end. If that happens and fence-sitting buyers remain out of the market, they could regret it. Here's one way to look at a $200,000 mortgage stretched over 30 years: At 4.2%, the monthly payment is $978 and total interest is $152,094. At 6%, the monthly payment is $1,199.10 and total interest is $231,677. That's about $80,000 in extra interest loan payments over the course of the loan, and it's 80,000 reasons why buying a house now, rather than waiting a year, may be a great idea.
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