Low Mortgage Rates Make 2012 Record Year for Home Affordability

2012 will go down as the year that homes were the most affordable ever according to the National Association of Realtors (NAR) Home Affordability Index. For those who can actually get a mortgage loan, record low mortgage rates and declines in home prices over the past several years have made homes more affordable than ever.

The NAR's National Housing Affordability Index was at 198.2 in November 2012 and the NAR predicts the index average for the 2012 year will be at 194 - a record high. The index is based on the relationship between median home price, median family income, and average mortgage interest rates. The higher the index number, the greater the household purchasing power for consumers.

Unfortunately, very tight lending restrictions by lenders is preventing many consumers from getting a loan and is hampering the housing recovery. For consumers who can get a mortgage loan, 30 year mortgage rates today can be found as low as 2.875 percent with points. Current mortgage rates on 15 year conforming loans can be found as low as 2.25 percent with points.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #1835285

5.478%

15-Year Fixed

5.250%

$6,000

Includes 1.000 points for $4,000

Lender Fees: $2,000

$3,216 /mo

Next >

NMLS #401822

5.642%

15-Year Fixed

5.375%

$7,000

Includes 0.750 points for $3,000

Lender Fees: $4,000

$3,242 /mo

Next >

NMLS #1025894

5.667%

15-Year Fixed

5.490%

$4,612

Includes 0.978 points for $3,912

Lender Fees: $700

$3,267 /mo

Next >

NMLS #2059741

5.751%

15-Year Fixed

5.625%

$3,272

Includes 0.818 points for $3,272

Lender Fees: $0

$3,295 /mo

Next >

NMLS #6606

5.890%

15-Year Fixed

5.740%

$3,876

Includes 0.969 points for $3,876

Lender Fees: $0

$3,320 /mo

Next >

NMLS #1835285

6.368%

30-Year Fixed

6.250%

$5,000

Includes 0.750 points for $3,000

Lender Fees: $2,000

$2,463 /mo

Next >

NMLS #1835285

6.377%

5-Year ARM

6.250%

$5,368

Includes 0.842 points for $3,368

Lender Fees: $2,000

$2,463 /mo

Next >

NMLS #2059741

6.583%

30-Year Fixed

6.490%

$3,896

Includes 0.974 points for $3,896

Lender Fees: $0

$2,526 /mo

Next >

NMLS #1025894

6.713%

30-Year Fixed

6.625%

$3,656

Includes 0.739 points for $2,956

Lender Fees: $700

$2,562 /mo

Next >

NMLS #401822

6.770%

30-Year Fixed

6.625%

$5,995

Includes 1.000 points for $4,000

Lender Fees: $1,995

$2,562 /mo

Next >

NMLS #6606

6.834%

30-Year Fixed

6.740%

$3,888

Includes 0.972 points for $3,888

Lender Fees: $0

$2,592 /mo

Next >

NMLS #3030

6.909%

15-Year Fixed

6.750%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$3,540 /mo

Next >

NMLS #3030

7.602%

30-Year Fixed

7.500%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$2,797 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

The NAR chief economist, Lawrence Yun said:

Although 2012 was highest on record, the excessively tight underwriting precluded many would-be home buyers from locking-in generational low interest rates. Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power. A window of opportunity remains open for buyers who can qualify for a mortgage.

Today's mortgage rates, even at record lows, will move even lower in the beginning of 2013 but will probably head higher later in the year. Higher home prices expected in 2013 will cause the home affordability index to decline, meaning that homes are expected to be less affordable in 2013 then they were in 2012. The NAR projects the housing affordability index to average 160 during 2013.

If you're in a position to buy a home and have been waiting on the sidelines for home prices to drop further or mortgage rates to drop lower, you should take the leap and buy a home. Home prices have been increasing for the past 15 months are expected to move higher.

If you have been thinking about refinancing your current mortgage loan, you should do it now because refinance rates are expected to increase in the second half of 2013. This is true for both fixed mortgage rates and adjustable mortgage rates on both conforming and jumbo mortgage loans.