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David Sims is the managing member of RidgeHaven Capital LLC. We prefer distressed equities and value investing. The firm was established to manage wealth with an eye on fundamental value, but also an understanding of technical trends and market behavior. David is a Certified Public Accountant... More
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  • 30-Year Fixed Rate Hits New Low 0 comments
    Jul 5, 2012 2:01 PM | about stocks: FMCC, FNMA, NLY

    This morning Freddie Mac released information showing that 30-Year Fixed Rate Mortgages hit all-time lows, never before seen. Freddie reports:

    • 30-year fixed-rate mortgage (NYSE:FRM) averaged 3.62 percent with an average 0.8 point for the week ending July 5, 2012.
    • 15-year FRM this week averaged 2.89 percent with an average 0.7 point.

    (click to enlarge)

    In comparison, mortgages originated in October of 1981 had rates over 18%. A $200,000 FRM with a 3.62% rate would have a monthly payment somewhere around $1,200. A $200,000 FRM with an 18% rate would have a mortgage payment around $3,300.

    As the Fed extends Operation Twist, consumers should continue to benefit from this historical rate cut and stimulus.

    Disclosure: I am long OTCQB:FMCC, OTCQB:FNMA.

    Additional disclosure: Long GSE preferreds.

    Stocks: FMCC, FNMA, NLY
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