Lowest Rates On Official Record Are Here Now (chart)

By TheBasisPoint, December 3rd, 2009

Make no mistake: the lowest rates on official record are here now. The chart below shows rates from December 2009 back to April 1971, when Freddie Mac started officially tracking 30 year mortgage rates. The high was in October 1981, when then Fed chairman Paul Volcker was hiking rates to battle inflation (more on this below). At that time, borrowers paid an average of 2.3 points to buy a rate down to 18.45%. The low was November 25, 2009, when borrowers averaged 0.7 points to buy a rate down to 4.78%—note that 4.78% with 0.7 points was also achieved April 2 and April 30, 2009. These are national average rates on loans up to $417,000 for single family homes with 20% or more equity in the property. Rates change daily as mortgage bonds trade.

In 1981, Volcker and his FOMC pushed the Fed Funds Rate to an average of 19% (compared to .25% today) in order to beat the 14.6% average inflation of the day (compared to 0.2% full and 1.7% ex-Oil&Energy now). This inflation battle caused two back-to-back recessions. The first one began in January 1980 and unemployment reached in August 1980 at 7.8%. The second one began in July 1981 and unemployment peaked at 10.8% in December 1982 (compared to 10.2% now).

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http://www.thebasispoint.com/2009/12/18/fed-mortgage-bond-program-december-10-16-week-50/ Fed Mortgage Bond Program, December 10-16 (week 50) | The Basis Point

[...] elevate mortgage bond prices which pushes rates down. It’s very likely that the November 25 record rate low that markets hit will remain the record low. The Fed will continue buying through March 31, 2010 [...]
http://www.thebasispoint.com/2009/12/29/sp-october-home-prices-down-7-3-yoy-9th-month-of-less-decline-flat-results/ S&P: October Home Prices Down -7.3% YOY, 9th Month of Less Decline, ‘Flat’ Results. | The Basis Point

[...] the Fed can generally be expected to ease off rate stimulus slowly, whereas in the early 1980s, the Fed hiked rates sharply to battle massive inflation and it caused back-to-back recessions. Case Shiller October 2009 Home [...]
http://www.thebasispoint.com/2010/01/04/fed-mortgage-bond-program-december-17-30-weeks-51-52/ Fed Mortgage Bond Program, December 17-30 (weeks 51-52) | The Basis Point

[...] elevate mortgage bond prices which pushes rates down. It’s very likely that the November 25 record rate low that markets hit will remain the record low. The Fed will continue buying through March 31, 2010 [...]
http://www.thebasispoint.com/2010/01/22/fed-mortgage-bond-program-january-14-20-week-55-fed-at-92-of-1-25t-budget/ Fed Mortgage Bond Program, January 14-20 (week 55). Fed At 92% Of $1.25t Budget. | The Basis Point

[...] elevate mortgage bond prices which pushes rates down. It’s very likely that the November 25 record rate low that markets hit will remain the record low. The Fed will continue buying through March 31, 2010 [...]
http://www.thebasispoint.com/2010/03/05/how-will-rates-move-in-these-final-weeks-of-the-feds-mortgage-stimulus-program/ How Will Rates Move In These Final Weeks of the Fed’s Mortgage Stimulus Program? | The Basis Point

[...] 1, 2009 is to elevate mortgage bond prices which pushes rates down. It’s very likely that the record rate low markets hit on November 25, 2009 will remain the record low. The Fed will continue buying through [...]
http://www.thebasispoint.com/2010/03/19/2-weeks-and-10b-left-in-feds-1-25t-rate-stimulus-program-what-now/ 2 Weeks and $10b Left In Fed’s $1.25t Rate Stimulus Program. What Now? | The Basis Point

[...] is to elevate mortgage bond prices which pushes rates down. We’ve held the position that the record rate low set on November 25, 2009 will remain the record low. The Fed will use up it’s $1.25t budget [...]
http://topsy.com/trackback?url=http://www.thebasispoint.com/2009/12/03/lowest-rates-on-official-record-are-here-right-now-chart/ Tweets that mention Lowest Rates On Official Record Are Here Now (chart) | The Basis Point — Topsy.com

[...] This post was mentioned on Twitter by Gabriella Fracchia. Gabriella Fracchia said: The record rate low set on November 25, 2009 (see chart: http://bit.ly/cF3mgH) is very likely to remain the record low. http://bit.ly/a2chPg [...]
http://www.thebasispoint.com/2010/04/24/weeklybasis-42310-rate-lock-bias-next-week-federal-homebuyer-tax-credit-expires-friday/ WeeklyBasis 4/23/10: Rate Lock Bias Next Week, Federal Homebuyer Tax Credit Expires Friday | The Basis Point

[...] were net down .125%, bringing conventional conforming rates (on loans up to $417,000) within .1% of all-time record lows. Below is a recap of last week and rationale for a rate lock bias going into next week. And don’t [...]
http://www.thebasispoint.com/2010/03/27/fed-rate-stimulus-ends-march-31-impact-on-mortgage-shoppers/ Fed Rate Stimulus Ends March 31. Impact On Mortgage Shoppers. | The Basis Point

[...] Rates Spike Now That The Fed Is Done Helping? The record rate low set on November 25, 2009 is very likely to remain the record low. Below is an excerpt from a [...]

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