Mortgage Rates Dive In March

Last June, mortgage interest levels fell to 5.21 percent with .5 points for 30-year, fixed-rate loans according to Freddie Mac, the lowest rates seen since the late 1950s.

We didn't quite return to those summer levels in March, but we didn't miss by much. Late in the month, Freddie Mac said that interest levels reached 5.4 percent with .7 points for 30-year, fixed-rate loans. In comparison, the rate a year ago was 5.91 percent.

The latest round of falling rates means that buyers and owners once again have an opportunity to enter the mortgage marketplace on a remarkably favorable basis. People who bought or refinanced as recently as last Fall may want to re-examine their mortgage financing. While it's possible that rates may decline further, no one knows with certainty what the future will bring. Alternatively, we know what rates are now in place and as this is written such rates are extremely attractive.

Moving Surprises

With record numbers of homes being sold during the past few years and with a growing population it seems logical that more and more of us would be on the move. But in fact, says the Census Bureau, "Americans are moving at some of the lowest rates in more than 50 years."

Huh? How can this be?

What's declined are not the number of people who are moving, but the percentages.

For 1948, census figures show that 20 percent of the population moved compared with 14 percent in 2003.

However, we have a lot bigger population today than just after World War II. In 1948 we were a nation of 146 million people. If 20 percent of us moved, that would equal 29.2 million individuals.

In 2003 we had 291 million people. Fourteen percent of this population equals 40.47 million movers.

We may be moving proportionately less but we tend to be moving further: In 2003, says the Census Bureau, 19 percent of all moves were to a different state, up from 16 percent in 1994.

Among people who changed residences between 2002 and 2003, most (51 percent) moved for housing-related reasons, then family reasons (26 percent) and work-related reasons (16 percent).

Bonds & Rates

Speaking of mortgage interest....

You hear much in the news about interest rates, bonds and mortgages. In general terms, mortgage rates and interest levels for 10-year bonds tend to closely track one another.

While it may seem counter-intuitive, when bond rates rise interest levels fall. Here's why:

Let's say that a bond paying 4 percent interest sells for $1,000. A bondholder would receive $40 annually. If the market price of the bond dips to $950, a bondholder still receives $40 per year -- but someone buying the bond at $950 would receive an effective annual return 4.21053 percent ($40 compared to $950).

Alternatively, if the market price for bonds rises to $1,050, then a bond buyer would pay $1,050 and still receive $40 in interest -- a return of 3.80952 percent.

So ... if you hear the news reporting that bond prices are up, take a look at mortgage rates -- they may be down, and perhaps worth your attention.

Remember Black & White TVs?

Televisions have become so common that it's hard to believe color sets were first introduced in 1954, just 50 years ago. Today, Census Bureau figures show that 98.2 percent of all homes have at least one television, and most have two or more. Why?

• Prices have plummeted. Those primitive 1954 sets cost $1,000 -- that's equal to $6,921.93 in today's dollars, according to the Bureau of Labor Statistics.

• There are more options. A few channels have been replaced with hundreds of choices.

• Technology has changed. Pictures are clearer and have better resolution. Screens are often just a few inches thick. Portable sets can be easily moved and even played in cars.

• It's not just a "TV" anymore. Today a television set is likely to be the focus of a home entertainment center, a room set aside with video, stereo and DVD connections.

The result of all these changes? The Census Bureau says a typical adult, aged 18 and over, now watches 1,669 hours of television a year -- the equivalent of 70 days before the tube.

Need Help Sending & Shipping?

Several online sites are now available to help you find the best shipping options when it's time to move stuff to distant places.

iShip.com compares rates for the Postal Service and several leading private companies. For bigger and heavier stuff, consider DHL/Airborne, FreightQuote.com, FedEx Freight, and the UPS Store. For pianos, antiques and such, take a look at NW Delivery.

For more articles by Peter G. Miller, please press here.

Published: March 30, 2004

Use of this article without permission is a violation of federal copyright laws.

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .