USA TODAY, June 14, 2005 — Conventional 30-year mortgages fell out of favor last year as home buyers seeking to reduce their monthly payments opted for adjustable-rate and interest-only mortgages. During the second half of 2004, adjustable-rate and interest-only loans accounted for 63% of mortgage originations, according to the Mortgage Bankers Association. But while high pants will, hopefully, remain in the back of the closet, fixed-rate mortgages are enjoying a renaissance.
At Wells Fargo, fixed-rate mortgages accounted for nearly half of all mortgages in the first quarter of this year, up from 35% during the fourth quarter of 2004. The reason: Rates for 30-year mortgages are at a 14-month low. Last week, the average 30-year fixed-rate mortgage was 5.56%, the lowest since April 1, 2004, according to mortgage giant Freddie Mac. The decline has narrowed the difference between long- and short-term mortgage rates. The average rate for a one-year ARM was 4.21% last week, up from 4.14% a year ago, according to Freddie Mac.
Comment: We just locked in a 30-year fixed jumbo last week at 6%. We toyed around with the idea of a hybrid, but we’re planning on staying in our house a long time and decided it was worth it to pay a premium to be able to sleep at night. Only time will tell.
Good Old 30-Year Mortgages Are Back [USA Today]