San Diego Mortgage News

The push for home ownership as part of “The American Dream” officially started in the 1940’s but the campaign realized success when homeownership of one-family detached homes rose significantly in the 1950s reaching over 50% for the first time in our nation’s history. From there it rose modestly in the 1960s and 1970s, dropped slightly in the 1980s, rebounded in the 1990s, and reached 87% in 2000.  This was considered a great success for our economy even though people were buying homes with interest rates well above 8.5% interest rates on a 30-year fixed mortgage.  I guess compared to the 15% interest rates in the 1980s this was viewed as “low rates”.

Where are we now?

According to the Census Bureau homeownership rates are steady at 65%.  Why is this significant?  Because in the past month the average rate on a 30-year fixed mortgage fell to 4.1 percent, according to mortgage buyer Freddie Mac.  That's the almost the lowest since it began keeping records in 1971.

For months, Freddie had pointed to data from the National Bureau of Economic Research showing that rates were lower in the early 1950s, when long-term mortgages typically lasted just 20 or 25 years.  But Freddie says that's no longer true: Today's average 30-year rate is even lower than the average 20- or 25-year rate was in the 1950s. The tragedy is that more than 40% of homeowners still have loans with interest rates of over 6%.  While this is not as obscene as rates in the 1980’s, American families are still leaving money on the table every day.  Are you one of those families?