30-Year Fixed Mortgage

30-Year Fixed Mortgage at Lowest Rate (December 2010)

The 30-year fixed mortgage rate peaked at 4.55 percent last Thursday, and then fluctuated between 4.42 percent and 4.48 percent for the remainder of the week. The lowest reported 30-year fixed rate prior to this week was 4.5 percent on December 7, 2010.

Additionally, the 15-year fixed mortgage rate this morning was 3.69 percent and for 5/1 ARMs, the rate was 2.92 percent.

Calgary Mortgage Rates Will Slowly increase in 2010

The CMHC best case scenario, expect mortgage rates will continue to slowly increase in 2010 with a one year mortgage rate to be in the 3.6 to 4.8% range and the three and five year mortgage rates to be in the 4.2 to 6.7% range. In 2011, CMHC forecasts that the one year mortgage rate will be in the range of 5.0 to 6.0% whereas, the three and five year mortgage rate will be in the range of 5.6 to 7.2%. However, if the economy recovers at a faster rate than expected, mortgage rates may increase at a more rapid rate.

Calgary 2010 Housing Outlook

The CMHC reported that the housing starts will start to rise in 2010 by 39% to 8,800 units. This increase is a result of a growing economy, low mortgage rates and strong demand and low inventory conditions. In 2011, a forecast of 17% increase with 10,300 units expected.

The New House Pricing Index is expected to rise by 2.7% in 2010 and 3.4% in 2011. The median absorbed price for homes in 2010 is $420,000 an expected 7% decline from 2009.

Multiple starts are expected to rise 49% with 2,300 units in 2010 but still remain historically low. A 35% increase is forecast in 2011 with 3,100 units as the economy improves and inventory costs decrease.

A slight increase in MLS sales from 2009 is forecast, with 25,000 sales in 2010. A further 4% increase to 26,000 units is expected in 2011 as the economy grows, net migration increases, higher wages, and more job opportunities are available.

The average price is expected to increase 4.4% to $403,000 in 2010 after two years of declining. With balanced conditions, a further increase of 3.7% to $418,000 is expected in 2011.