Rates Improve

Rates have improved to begin the week. The bond market has improved and rates are to the lows we saw two weeks ago.

30 year fixed –

Last week:

3.500 percent (3.612 percent APR)


3.500 percent (3.582 percent APR)

0.030 cost improvement


15 year fixed –

Last week:

3.000 percent (3.258 percent APR)


3.000 percent (3.221 percent APR)

0.037 cost improvement

As you can see, the note rate stays the same, but we have seen an improvement in cost. In other words, it is now cheaper to get lower rates. After last week’s brief rise in prices, we are back to record low prices.

Last week we saw a number of important housing numbers released. Generally, the MBA Purchase Applications, FHFA Price Index, and Pending Home Sales numbers suggested an overall positive trend (link), which jumpstarted talk about a march towards housing recovery.

Then, New Home Sales and Median Home Prices were released the next day, and these numbers gave more cause for concern (link).  December new home sales declined below expectations, dropping the month 2.2 percent from November.  December’s new home sales capped off 2011 as the slowest year on record for home builders. Median home prices also dropped in December, making 2011 prices down 12.8 percent from 2010.