Co-op/condo mortgage rates continued free fall in February

Real Estate Weekly, March 28, 2001

A weakening economy sent mortgage rates for New York luxury co-ops and condominiums plummeting again in February.

So reports The Manhattan Mortgage Company, a leading specialist in co-op, condominium and private home residential financing, which surveys and analyzes New York mortgage rates and borrower preferences on a monthly basis.

According to its February report, which is based on data from over 30 major lending institutions, all serving the New York residential marketplace, both of the two most popular fixed-rate mortgage products dropped during the month as did all five of the leading adjustable rate mortgages.

In the fixed-rate category, 15-year fixed-rate mortgages slipped to 6.75% from 6.875% and 30-year fixed rates dipped from 7.125% to 7%.

In the adjustable mortgage category, one-year adjustables fell from 6.5% to 6.375%; three-year products decreased from 7% to 6.875%; five-year adjustables dropped to 6.875% from 7%; seven-year adjustable loans decreased to 7.125% from 7.25% and ten-year adjustables fell to 7.25% from 7.375%.

"Bad economic news is good news for bonds and therefore good news for mortgage rates," noted Manhattan Mortgage Company Chairman and CEO Melissa Cohn, who reports that rates have fallen by more than a half-point in the past three months.

In terms of loan preferences, The Manhattan Mortgage Company survey reported that 32% of co-op/condominium borrowers chose five-year adjustable rate mortgages in February while 30-year fixed rate mortgages accounted for 38% of the marketplace.