Interest rates defy predictions, delight homebuyers Back in February, many predicted that mortgage rates would be increasing in the second half of the year. Throughout 2009 and the first quarter of 2010, the Federal Reserve purchased over $1 trillion in mortgage-backed securities. This commitment artificially lowered mortgage rates by one-half to one full percentage point (100 basis points). When this program ended in April, it was expected to stimulate a hike in rates – but the impact proved to be slight and very temporary.
30-YEAR FIXED INTEREST RATE OVER PAST 90 DAYS
5.20%
5.07%
4.93%
4.80%
In fact, rates on 30-year fixed rates have declined in recent weeks, falling to an average of 4.724 percent 4.67% as of July 20 – a drop of 12 basis points over one month. Why? With recent economic problems 4.53% in Europe, we have seen a flight to quality from May 2010 Today investors around the world who want to purchase U.S. treasury bonds and mortgage-backed securities. Coupled with continued uncertainty in the U.S. economy, investors continue to look for safe investments, a condition that has driven mortgage rates to historic lows. As long as inflation remains at bay and the strength of the national economy is yet to be determined, we expect rates to remain at historic lows.
Opportunity knocks with declining jumbo mortgage rates Rates on jumbo loans have ebbed to their lowest level since 2003, dipping to 5.32 percent as of July 20 for 30-year fixed loans. Jumbo loans are mortgages that exceed $417,000 and are not backed by Fannie Mae or Freddie Mac. The rates are a full 150 basis points below the same time last year, when jumbos registered at 6.86 percent. For perspective, the monthly mortgage for an $800,000 loan at 6.86 percent is $5,247 per month. By comparison, payments on the same loan at 5 percent would be approximately $950 less. At a time when selection is robust in the upper-end market in Northern Colorado, such attractive rates make it an ideal time for move-up buyers to find affordability in the high-end market, or for current high-end owners to look for upgrade opportunities. There is a great selection on homes over $500,000. Call me to learn how you can take advantage of this significant decline in jumbo rates.
Northern Colorado towns lead state in population growth Tiny Timnath is standing tall. The town that sits right off Fort Collins’ southeast shoulder has lately been adding to its own physique, with 27.2 percent population growth between July 2008 and July 2009, according to the latest U.S. Census Bureau data. Timnath, which led the state in percentage growth, grew to 631 people over the 12-month period, up from 496. Lochbuie in Weld County came in a close second, with 26.2 percent growth, while Johnstown was No. 3 at 18.6 percent growth. Fort Collins, Northern Colorado’s biggest city at a population of 138,736, experienced 2.1 percent growth during the period; Greeley continued to inch closer to the 100,000 plateau, reaching 92,625 people with 1.7 percent growth, and Loveland added 1.7 percent to reach 66,215. Statewide, population grew 1.8 percent; Larimer County increased by 1.9 percent and Weld County added 2.4 percent.