Mortgage Rates Drop Below 6%

Loan rates are back in the 5%s and may keep falling. I’m not sure if this will create any notable demand increases in Austin, but buyers and investors do at least perk up when rates drop below 6%. On the downside, the “number of loans” limit recently fell from 10 to 4, meaning if you already have 4 or more real estate loans, you cannot obtain another conforming real estate loan. This has stopped at least one sale I know of.

From a Realtor email newsletter I receive:

For the first time since early spring, mortgage rates have fallen below the 6-percent threshold.

Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.

A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week’s rate.

3 thoughts on “Mortgage Rates Drop Below 6%”

  1. Very much enjoy your website. I wanted to reply to the comment about regarding the number of mortgages. If the requested mortgage is for primary residence, there is no limit to the number of mortgages one may have. The limit only applies to requests for investment or 2nd home mortgages.

    Just rec’d word that the Fed left short-term rates steady. Have a great day!!

  2. Wow Ed, your comment almost sounds like the sales pitch for fraud. Any house past your first is considered an investment, or 2nd/vacation home in the eyes of the gov’t. This is pretty evident by the buried terms of the housing bailout bill that turns 2nd homes/vacation homes only eligible for:

    (# of years actually lived in home full time/time of ownership)*(capital gains deduction).

    This is instead of a flat deduction of 250k/500k of gains before capital gains taxes. The gov’t is trying to crackdown on speculator investing.

  3. > Wow Ed, your comment almost sounds like the sales pitch for fraud.

    I didn’t read it that way. He’s simply pointing out that the limit excludes primary residence. So, if I want to sell my home and buy another to live in, I can do so even if I have more than 4 existing real estate loans.

    Heard on the news this morning that loan applications are up 30%+, driven by refinancing, while housing starts are at the lowest level since 1991. On the other side of this housing bubble I think we are certainly going to see a shortage of inventory as builders, at least in Austin, have pulled back a lot further than need to maintain equilibrium.



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