Co-op/condo mortgage rates plummet in August in NYC

Real Estate Weekly, Sept 22, 1993

After falling in July, interest rates for New York luxury co-ops and condominiums showed across-the-board drops in August.

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 August report, which is based on data from 10 major lending institutions, all serving the New York residential marketplace, rates fell for all four leading fixed-rate mortgages and the three most popular adjustable rate mortgages.

In the fixed-rate category, 10-year fixed-rate mortgages fell from 6.50 percent to 6.25 percent, 15-year fixed-rate mortgages tumbled from 6.75 percent to 6.5 percent, 30-year fixed-rate mortgages dropped from 7.25 percent to 6.875 percent, and seven-year fixed-rate mortgages dipped from 6.50 percent to 6.25 percent.

In the adjustable mortgage category, one-year adjustables declined from 4.625 percent to 4.375 percent, three-year adjustables dropped from 6 percent to 5.75 percent and five-year adjustables fell from 6.50 percent to 6.25 percent.

According to Melissa Cohn, partner of the Manhattan Mortgage Company, the decline in August's rates can be attributed to activity in the bond market, which hit record low yields at the end of the month, and economic data indicating no inflation and predictions of slow, steady growth.

In terms of loan preferences, The Manhattan Mortgage Company survey reported that 37 percent of coop /condominium borrowers chose 30-year fixed rate mortgages in August, while one-year adjustable-rate mortgages accounted for 29 percent of the marketplace.