2008 began with conforming rates at near 6% levels, prompting mortgage columnists to extol "nearly historical lows" and urge borrowers to fix their rates "now." And their haste seemed justified when rates climbed above 7% later in the year. Mortgage brokers' rate sheets, which used to change about once a week, were amended several times a day to keep up with wild market fluctuations. Rate swings increased further when Fannie Mae and Freddie Mac, the government-sponsored corporations that buy mortgages from lenders, jacked up the fees they charge as their own finances collapsed. In addition, mortgage credit became all but unattainable to those with less-than-perfect credit or less-than-adequate equity.
But by late December, the national average had dropped to roughly 5.1 percent, with some lenders offering rates at 4.75%!
In many weeks in between, however, there was a huge spread between the market’s highest and lowest rates. For borrowers, 2008 highlighted the importance of shopping around--a habit that mortgage industry executives say is still not practiced widely enough. Let's hope that the mortgage roller coaster slows down in 2009 and that money becomes more available for those at all credit levels.
