In what has become an almost weekly occurrence mortgage rates hit new all time lows. The 30 year rate fell from 4.56 to 4.54 this week. Rates have either reached new lows or matched old lows for 5 consecutive weeks.

The 15 year also reached an all time low dropping from 4.03 to 4.00. It will be interesting to see if the 15 year fixed will fall below 4.0 in the next few weeks. The 5 year arm dropped from 3.79 to 3.76 just .01 points above the all time low. The 1 year arm dropped from 3.70 to 3.64 which is also an all time low. Below are rates from the weeks from July 01, 2010 to July 29, 2010

Jul 29, 2010
30-fixed 4.54 15-fixed 4.00 5 ARM 3.76 1 ARM 3.64

Jul 22, 2010
30-fixed 4.56 15-fixed 4.03 5 ARM 3.79 1 ARM 3.70

Jul 15, 2010
30-fixed 4.57 15-fixed 4.06 5 ARM 3.85 1 ARM 3.74

Jul 08, 2010
30-fixed 4.57 15-fixed 4.07 5 ARM 3.75 1 ARM 3.75

Jul 01, 2010
30-fixed 4.58 15-fixed 4.04 5 ARM 3.79 1 ARM 3.80

Jan 14, 2010
30-fixed 5.06 15-fixed 4.45 5 ARM 4.32 1 ARM 4.39

Ok so mortgage rates are one thing but let’s look at mortgage payments. We took today’s rates and translated them into a mortgage payment on a 200k house. For the sake of comparison we did the same thing with rates from July 15th and January 14, 2010.

Jul 29
30-year $1018.12
15-year $1479.37
5-year ARM $927.36
1-year ARM $913.79

Jul 15
30-year $1021.7
15-year $1485.39
5-year ARM $937.61
1-year ARM $925.09

Jan 14
30-year $1080.98
15-year $1524.88
5-year ARM $992.09
1-year ARM $1000.34

So for a 200k loan the mortgage payment at 1018.12 is just a little above $1000 a month. Compared to January 14, 2010 a mortgage payment today is $62.86 less for a drop of 5.81 percent. That is pretty substantial considering that rates were already pretty low by historical standards on January 14th, 2010.

So what is going to happen moving forward. Although for some time I have felt that there was more of a danger of rates going up than down (and rates in that time have gone down), I am sticking with that same basic forecast. Rates are unnaturally low. They might fall a little bit in the next few weeks. I don’t the 30 year rate falling below 4.25. But overall there is more of a chance rates will rise drastically than fall drastically. And I would suspect rates will be higher in 6 months to a year from now. If rates did fall drastically there would have to be something substantially wrong with the economy like significant deflation.

But for now the current environment favors buyers. Rates are extremely low and since this is not leading to that much excitement in prospective home buyers there is not that much competition in the market. So we are seeing a lot of houses on the market, not many buyers and very low mortgage rates.

Ki works as a real estate broker in Texas. His site is a resource on Austin Tx real estate. It provides several free mortgage calculators along with a mortgage rate widget. His site also has a blog covering Austin Tx real estate.