Mortgage interest rates tied historic lows this week at about 4 3/4 percent. This rate was for the fixed rate, 30 year, conventional (20% down-payment). Wow. This is down from about 6% a year ago, and 6 1/4 % two years ago. Why are the rates so low? The government is still snapping up the majority of mortgage paper, and is slated to do so through early next year.
This post will be of most interest to my loan writing friends, a.k.a., mortgage brokers. I looked at the different types of loans used to purchase single family houses in the one-year period of July 2008 to July 2009 in Lane County. Raw data came from rmls.
Of the 3,172 sales, a little over ½ the loans were conventional; cash purchases came next, with one in five purchases last year, FHA insured loans comprised only 18%; and VA was a paltry 4%. Given the popularity of FHA loans these days, I was surprised to find that less than 1 in 5 purchase money loans last year were FHA.