As this week comes to a close, it is time again for the Illinois Mortgage Rates and News market and mortgage rate update. I want to emphasize that I am not an economist or an expert on the financial markets. What I am is an Illinois mortgage guy who follows the markets closely.

The big news for this week was the Fed cutting short term rates by .25%. The suspense going into the meeting was not on whether they would cut, but on how much they would cut. Wall Street, looking for a big move to bail out the big banks, was hoping for a half percent. When they didn’t get what they wanted they threw a fit. The next day the Fed tried to atone for their failings by announcing they were working with a consortium of European state banks to throw extra money to those banks in need. This helped take the pressure off and stocks improved, a little, while mortgage bonds continued to get hammered.

The CPI (Consumer Price Index) was released today and showed that inflation is still a problem. The overall rate was up .8% for the month. Not surprising. With oil prices high everything gets hit. After taking out oil and food, the core inflation rate was still up .3% for the month, the largest increase since February and well above the target. With inflation growing the consumer is getting blasted with higher prices while their paychecks stay the same. Consumer spending has been the engine that has kept the economy afloat. With the consumer squeezed by high prices and stagnant wages don’t expect consumers to spend their way to a recovery. In my opinion the Fed will have no choice but to ignore the inflation and continue to focus on avoiding a recession.

So that is the scoop in the markets. How has it affected mortgage interest rates? Surprisingly not that much. Last week mortgage rates dropped to their low for the year. We had a brief window where rates were great. If you moved fast you could have locked in on a refinance or purchase loan in the upper 5s. But by the end of the week they were back in the low 6s. Which is right where we are now.

Here is what rates look like as of today for an A+ borrower on a 30 day rate lock with 0 points, and 0 origination fee.  (Keep in mind there are dozens of factors which effect mortgage rates and your ability to be approved for a loan. These include your credit score, the loan to value, the loan amount, your documentation type, the loan purpose and on, and on. This is meant more as a gauge of where we are from week to week. If you would like a quote for your personal situation, give me a call and I’ll take the time to find the rate and program that is best for you.):

Conventional loans up to $417,000

30 year fixed rate    6.125%     6.183% APR

15 year fixed rate    5.75%      5.839% APR

5-1 A.R.M.               5.75%      5.839% APR         

7-1 A.R.M.               5.875%     6.483% APR

For Jumbo loans over $417,000

30 year fixed rate    6.875%     6.904% APR

7-1 A.R.M.               6.125%     6.229% APR

FHA LOANS up to $270,200 with 1 point origination fee

30 year fixed rate    5.875%    6.094% APR

These are only a few of the hundreds of programs available. We also have State of Illinois and City of Chicago bond programs with below market interest rates for first time home buyers. If you have a specific need give me a call and I’ll tell you exactly what we can do for you.

This is how mortgage bonds performed over the week. Red is bad, green is good.

Illinois Mortgage Rates and News

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