Juicy Estates

South Florida Interest Rate Update – Drifting Lower Ahead of Fed Meeting

December 15th, 2008 by James Venney
Categories: Interest Rate Updates
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Mortgage bonds, those pesky little things that seem to be causing so much trouble in the financial markets are at their best prices of the last 5 years. As a result mortgage interest rates are at their best levels of the last 5 years ahead of the Fed meeting on Tuesday December 16. We have witnessed a significant rally in MBS prices since October and in a normal environment you would expect that at some point this rally would run out of steam but these are strange days indeed.

As of December 15, 2008 current 30 year conforming interest rates are at 5.125% and 5/1 ARM Jumbo rates are at 5.875%. In my practice as a South Florida mortgage banker I have seen application volume increase dramatically in the past 10-12 days as a result of these low rates. Surprisingly most of the applications are for purchases, not refinances which bodes well for the local housing market. The South Florida mortgage market has stabilized in the past 2-3 months with no additional tightening of credit and/or underwriting standards with the exception of those changes scheduled for January 1st which include but are not limited to increase in the FHA down payment requirement to 3.5%.

This entry was posted on Monday, December 15th, 2008 at 12:53 pm and is filed under Interest Rate Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.