Current Mortgage Rates: Fixed-Rate or ARM?

current mortgage rates
current mortgage rates

Until recently, the only dilemma for home loan seekers was what kind of mortgage to take on: a 30-year fixed rate mortgage or adjustable rate (ARM). A gentle upward climb of current mortgage rates -- as well as home prices -- was looking inevitable. The smart money was predicting that home prices had dropped as low as they could go. For people looking for loans, it seemed like the perfect window to buy low and lock in a rock-bottom fixed rate.

But then the U.S. jobs report hit in February, and it was ugly. It showed an anemic gain of only 36,000 new jobs created. Then oil prices shot up in response to uprisings against Hosni Mubarak of Egypt, Tunisia's Zine al-Abidine Ben Ali and, of course, Libyan dictator Muammar al-Qaddafi. All this chaos started to weigh down on interest rates and home prices.

What does all this mean for Joe homebuyer or refinancer? It means the housing market may have further to fall before it starts to rebound. And rates could drop even further.

Understanding adjustable rate mortgages