Mortgage Rates Fall to a Record Low Level

30-year fixed rate mortgages closed out the year at 5.14% (data here, see graph above), the lowest rate on record (data back to 1964 here). Falling mortgage rates and falling home prices will be important factors in the real estate market's recovery in 2009.

Comments

[Paul Killinger:]

Mark,

Like you, I believe the general economy is setting up to do very well. It appears our chief policymakers are taking the advice of Dr.Friedman. When asked how to avert an economic depression Milton was said to have replied, "Simple, cut interest rates and print lots of money."

The one thing that is surprising to me is the level of fear being displayed by many of our fellow citizens, who are acting like Chicken Little and Humpty Dumpty. I suspect our 24/7 news cycles are having alot to do with that. I haven't decided yet if I think this is good or bad.

Will this serve to prolong the downturn in the business cycle, or get it over more quickly? We'll see.

Jan 02 09:11 AM

[sleepless_o...:]

Mark Perry and Paul Killinger - - -

When I count the beans, they don't support your optimism.

Jan 02 10:35 AM

[Crackers:]

How can this be the lowest mortgage rates as 3-4 years ago I placed a 4.5% mortgage on my home in Scottsdale. Mortgage rates need to be around 4% to do some good. The banks have lower rates but are trying to keep more profit to overcome the poor management thus not giving us lower mortgage rates. A 4% mortgage rate would be the stimulus to get the real estate market started in the right direction. If your payments are low enough you will stay in a house even if it is under water. May 2009 bring some great news & start the economy on a 5 year recovery

Jan 02 10:52 AM