Federal Reserve cuts rates and Mortgage Rates in Oklahoma City drop to Historical Lows

December 16, 2008 in For First Time Home Buyers, Time for a Mortgage by Joel Garcia | 1 comment

This in from the Associated Press

NEW YORK — The price of money for American consumers went on sale in a spectacular way Tuesday after the Federal Reserve cut interest rates to their lowest level on record and promised to keep them low for a long time.

In response, most banks cut the rate they charge their best customers, known as the prime rate, to 3.25 percent from 4 percent. The last time it was that low was in 1955, according to data from the Federal Reserve Bank of St. Louis.

What does this mean to you as a Buyer? It means that the money you need to buy a new house is cheap.

How Low are interest rates you ask?

Here is what a local lender here in Oklahoma City was quoting today with no points.

5% Fixed Interest Rate on an FHA Loan. And are you ready for this on a 95%LTV with a 740 FICO score we are at (drum roll please) 4.875% Fixed Interest Rate.

That is right 4.875%!

These rates are historically speaking about as low as they get. See chart below from Freddie Mac.

Monthly Average Commitment Rate And Points On 30-Year Fixed-Rate Mortgages Since 1971

	2008		2007		2006		2005		2004
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	5.76	0.4	6.22	0.4	6.15	0.5	5.71	0.7	5.71	0.7
February	5.92	0.5	6.29	0.4	6.25	0.6	5.63	0.7	5.64	0.7
March	5.97	0.5	6.16	0.4	6.32	0.6	5.93	0.7	5.45	0.7
April	5.92	0.4	6.18	0.5	6.51	0.6	5.86	0.6	5.83	0.7
May	6.04	0.5	6.26	0.4	6.60	0.5	5.72	0.6	6.27	0.7
June	6.32	0.7	6.66	0.4	6.68	0.5	5.58	0.6	6.29	0.6
July	6.43	0.6	6.70	0.4	6.76	0.5	5.70	0.5	6.06	0.6
August	6.48	0.7	6.57	0.4	6.52	0.4	5.82	0.5	5.87	0.7
September	6.04	0.7	6.38	0.5	6.40	0.5	5.77	0.6	5.75	0.7
October	6.20	0.6	6.38	0.5	6.36	0.4	6.07	0.5	5.72	0.7
November	6.09	0.7	6.21	0.4	6.24	0.5	6.33	0.6	5.73	0.6
December			6.10	0.5	6.14	0.4	6.27	0.5	5.75	0.6
Annual Average			6.34	0.4	6.41	0.5	5.87	0.6	5.84	0.7

	2003		2002		2001		2000		1999
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	5.92	0.6	7.00	0.8	7.03	0.9	8.21	1.0	6.79	0.9
February	5.84	0.6	6.89	0.7	7.05	1.0	8.33	1.0	6.81	1.0
March	5.75	0.6	7.01	0.7	6.95	0.9	8.24	1.0	7.04	0.9
April	5.81	0.6	6.99	0.7	7.08	0.9	8.15	1.0	6.92	1.0
May	5.48	0.6	6.81	0.7	7.15	1.0	8.52	1.0	7.15	1.0
June	5.23	0.6	6.65	0.6	7.16	1.0	8.29	0.9	7.55	1.0
July	5.63	0.5	6.49	0.6	7.13	0.9	8.15	0.9	7.63	1.0
August	6.26	0.7	6.29	0.6	6.95	0.9	8.03	1.0	7.94	1.0
September	6.15	0.6	6.09	0.6	6.82	0.9	7.91	1.0	7.82	1.0
October	5.95	0.6	6.11	0.6	6.62	0.9	7.80	1.0	7.85	1.0
November	5.93	0.6	6.07	0.6	6.66	0.8	7.75	0.9	7.74	1.0
December	5.88	0.7	6.05	0.6	7.07	0.8	7.38	1.0	7.91	1.0
Annual Average	5.83	0.6	6.54	0.6	6.97	0.9	8.05	1.0	7.44	1.0

	1998		1997		1996		1995		1994
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	6.99	1.4	7.82	1.8	7.03	1.8	9.15	1.8	7.07	1.7
February	7.04	1.2	7.65	1.7	7.08	1.7	8.83	1.9	7.15	1.8
March	7.13	1.2	7.90	1.8	7.62	1.8	8.46	1.8	7.68	1.7
April	7.14	1.0	8.14	1.7	7.93	1.8	8.32	1.9	8.32	1.8
May	7.14	1.1	7.94	1.7	8.07	1.7	7.96	1.8	8.60	1.8
June	7.00	1.0	7.69	1.7	8.32	1.7	7.57	1.8	8.40	1.8
July	6.95	1.1	7.50	1.8	8.25	1.8	7.61	1.8	8.61	1.8
August	6.92	1.1	7.48	1.7	8.00	1.7	7.86	1.8	8.51	1.8
September	6.72	1.0	7.43	1.7	8.23	1.7	7.64	1.8	8.64	1.8
October	6.71	0.9	7.29	1.7	7.92	1.7	7.48	1.9	8.93	1.8
November	6.87	0.9	7.21	1.7	7.62	1.8	7.38	1.8	9.17	1.8
December	6.74	1.0	7.10	1.8	7.60	1.7	7.20	1.8	9.20	1.8
Annual Average	6.94	1.1	7.6	1.7	7.81	1.7	7.93	1.8	8.38	1.8

	1993		1992		1991		1990		1989
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	7.99	1.6	8.43	1.8	9.64	2.1	9.90	2.1	10.73	2.1
February	7.68	1.5	8.76	1.8	9.37	2.0	10.20	2.1	10.65	2.2
March	7.50	1.6	8.94	1.9	9.50	2.1	10.27	2.1	11.03	2.2
April	7.46	1.7	8.85	1.7	9.50	2.0	10.37	2.1	11.05	2.2
May	7.47	1.8	8.67	1.7	9.47	2.0	10.48	2.0	10.77	2.1
June	7.42	1.6	8.51	1.7	9.62	2.1	10.16	2.0	10.20	2.1
July	7.21	1.6	8.13	1.6	9.58	2.0	10.04	2.0	9.88	2.1
August	7.11	1.5	7.98	1.7	9.24	1.9	10.10	2.0	9.99	2.1
September	6.91	1.5	7.92	1.7	9.01	1.9	10.18	2.1	10.13	2.0
October	6.83	1.5	8.09	1.8	8.86	1.9	10.17	2.2	9.95	2.0
November	7.16	1.6	8.31	1.9	8.71	1.8	10.01	2.1	9.77	2.0
December	7.17	1.7	8.21	1.6	8.50	1.8	9.67	1.9	9.74	2.0
Annual Average	7.31	1.6	8.39	1.7	9.25	2.0	10.13	2.1	10.32	2.1

	1988		1987		1986		1985		1984
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	10.38	2.0	9.20	2.2	10.89	2.3	13.08	2.5	13.37	2.3
February	9.89	2.1	9.08	2.1	10.71	2.3	12.92	2.4	13.23	2.4
March	9.93	2.0	9.04	2.1	10.08	2.3	13.17	2.6	13.39	2.4
April	10.20	2.1	9.83	2.3	9.94	2.2	13.20	2.6	13.65	2.4
May	10.46	2.1	10.60	2.3	10.15	2.3	12.91	2.5	13.94	2.5
June	10.46	2.0	10.54	2.2	10.69	2.3	12.22	2.5	14.42	2.5
July	10.43	2.0	10.28	2.2	10.51	2.2	12.03	2.5	14.67	2.6
August	10.60	2.2	10.33	2.1	10.20	2.1	12.19	2.6	14.47	2.6
September	10.48	2.1	10.89	2.2	10.01	2.2	12.19	2.6	14.35	2.6
October	10.30	1.9	11.26	2.2	9.98	2.1	12.14	2.5	14.13	2.6
November	10.27	2.1	10.65	2.1	9.70	2.0	11.78	2.4	13.64	2.5
December	10.61	2.1	10.64	2.1	9.32	2.1	11.26	2.3	13.18	2.5
Annual Average	10.34	2.1	10.21	2.2	10.19	2.2	12.43	2.5	13.88	2.5

	1983		1982		1981		1980		1979
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	13.25	2.2	17.48	2.2	14.90	2.0	12.88	1.6	10.39	1.5
February	13.04	2.0	17.60	2.2	15.13	2.0	13.04	1.6	10.41	1.5
March	12.80	2.2	17.16	2.2	15.40	2.0	15.28	2.0	10.43	1.5
April	12.78	2.1	16.89	2.3	15.58	2.0	16.32	1.9	10.50	1.5
May	12.63	2.1	16.68	2.3	16.40	2.1	14.26	1.9	10.69	1.6
June	12.87	2.1	16.70	2.2	16.70	2.1	12.71	1.8	11.04	1.6
July	13.43	2.2	16.82	2.2	16.83	2.1	12.19	1.8	11.09	1.7
August	13.81	2.2	16.27	2.3	17.28	2.1	12.56	1.7	11.09	1.7
September	13.73	2.2	15.43	2.3	18.16	2.1	13.20	1.7	11.30	1.6
October	13.54	2.1	14.61	2.2	18.45	2.3	13.79	1.7	11.64	1.7
November	13.44	2.1	13.82	2.2	17.82	2.1	14.21	1.7	12.83	1.7
December	13.42	2.2	13.62	2.2	16.95	2.1	14.79	1.7	12.90	1.6
Annual Average	13.24	2.1	16.04	2.2	16.63	2.1	13.74	1.8	11.20	1.6

	1978		1977		1976		1975		1974
	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts	Rate	Pts
January	9.01	1.3	8.72	1.1	9.02	1.1	9.43	1.2	8.54	1.0
February	9.14	1.3	8.67	1.1	8.81	1.0	9.10	1.2	8.46	1.0
March	9.20	1.3	8.69	1.2	8.76	1.3	8.89	1.1	8.41	1.0
April	9.35	1.3	8.75	1.1	8.73	1.3	8.82	1.0	8.58	1.0
May	9.57	1.3	8.83	1.1	8.76	1.3	8.91	1.1	8.97	1.1
June	9.71	1.4	8.86	1.1	8.85	1.3	8.89	1.0	9.09	1.2
July	9.74	1.4	8.94	1.1	8.93	1.2	8.89	1.1	9.28	1.3
August	9.78	1.3	8.94	1.1	9.00	1.2	8.94	1.1	9.59	1.3
September	9.76	1.3	8.90	1.1	8.98	1.2	9.12	1.1	9.96	1.4
October	9.86	1.2	8.92	1.2	8.92	1.2	9.22	1.1	9.98	1.5
November	10.11	1.2	8.92	1.1	8.81	1.3	9.15	1.1	9.79	1.4
December	10.35	1.4	8.96	1.2	8.79	1.2	9.10	1.1	9.62	1.3
Annual Average	9.64	1.3	8.85	1.1	8.87	1.2	9.05	1.1	9.19	1.2

	1973		1972		1971
	Rate	Pts	Rate	Pts	Rate	Pts
January	7.44	0.9	7.44	1.0	na	na
February	7.44	1.0	7.32	0.9	na	na
March	7.46	0.9	7.29	0.9	na	na
April	7.54	0.9	7.29	0.9	7.31	na
May	7.65	0.9	7.37	0.9	7.43	na
June	7.73	0.9	7.37	0.9	7.53	na
July	8.05	1.0	7.40	0.9	7.60	na
August	8.50	1.0	7.40	0.9	7.70	na
September	8.82	1.1	7.42	1.0	7.69	na
October	8.77	1.1	7.42	1.0	7.63	na
November	8.58	1.0	7.43	1.0	7.55	na
December	8.54	1.0	7.44	1.0	7.48	na
Annual Average	8.04	1.0	7.38	0.9	na	na

If you took a close look at the above table you will notice that you did not see any loans under 5% and you definitely did not see any under 5% with no points.

If you were looking for the perfect time to buy a house. Look no Further.

It was reported today that new housing starts are at their lowest since they started tracking them in 1959. What does that mean? That means there are very few new houses being put out there which will lead to decreasing inventories leading to a stabilization of home prices and possibly in the near future increasing house prices. In short it means we are at or near the bottom of housing devaluation. Throw in the lowest mortgage interest rates ever and a $7500.00 Tax Credit and those sitting on the sideline are going to look back on today with regretful nostalgia.

Don’t miss out on a once in a lifetime opportunity and I won’t have to say “I told you so.”