As a homeowner, your “total cost of homeownership” is tied to your mortgage. The higher your mortgage rate, the more interest you pay over time. And regardless of your mortgage interest tax-deductibility, over 30 years, mortgage interest accrues into something fierce .

Lately, though, with mortgage rates down, those long-term interest costs have plunged.

- April 2011 : Over 30 years, a new $300,000 mortgage accrues $276,000 in interest
- August 2011 : Over 30 years, a new $300,000 mortgage accrues $227,000 in interest

Check out his site for more information and contact your local mortgage lender to learn more.

According to Scott Van Voorhis over at Boston.com, two Columbia Business School professors have a bold proposal for fixing the nation’s housing market problem and the US economy.

R. Glenn Hubbard, dean of the Columbia Business School, and Chris Mayer, a professor of finance and economics and the school’s senior vice dean, would like to refinance 30 million mortgages across the country down to a once unimaginable 4 percent.

Whoa.

You can only see their proposal as a theoretical one; there’s no way that this could come to pass. And, they’re not the first to come up with the idea. (Even I was talking about this exact thing, last weekend!)

There are great benefits to doing this. Mr. Van Voohris says the professors estimate it would free up $60 billion in cash that consumers would (hopefully) spend.

But, even if the majority put the difference in savings into savings, isn’t that a good thing?

The program would reward responsible owners, for once, so it would be mostly met with approval from the American public – and what politician could be against that??

Bond holders have always recognized that there is a risk that their loans will be called. That’s all that would happen here. The loans would be redeemed and replaced with loans at lower rates. Since no one’s done a complete analysis on this, it’s hard to know who this would affect and how.

(The US Government should be redeeming and reissuing all its long-term treasury debt anyway, btw.)

I don’t necessarily agree that housing in Greater Boston is “over-valued”; as a percentage of household income, taking out a $400k loan this year would cost you less than any time since at least 1990.

I agree; picking “losers” and “winners” shouldn’t be the job of the government. The free-market should decide.

People’s opinions on this idea probably vary based on whether or not they stand to gain.

HomeSteps, the real estate sales unit of Freddie Mac, today announced “Condo Cash”, a special limited time offer that will provide eligible condominium buyers with up to $1,500 for standard condominium association dues.

HomeSteps’ Condo Cash is limited to buyers who submit offers between August 15 and November 15, 2011 and close escrows on or before December 30, 2011. HomeSteps’ Condo Cash offer is valid only on HomeSteps homes that have been on the market for at least 120 days and are sold to owner-occupant buyers.

A two-year Home Protect® limited home warranty that covers electrical, plumbing, air conditioning, heating and other major systems and appliances is offered on some eligible HomeSteps homes. Home Protect also provides discounts of up to 30 percent on the purchase of appliances.

For complete terms and conditions, visit www.homesteps.com.

I plotted the Standard & Poors / Case-Shiller home price index data for every month and year from January 1987 to May 2011. A rough estimate of what homes were worth in the past, and as good as any data for an analysis of this sort.

Then, I used data from the HSH historic mortgage rates website to plot average 30-year fixed-rate mortgage loans for each month during the past 24 years.

In May 2011, the median single-family home sold in Massachusetts for $304,000, according to The Warren Group. Working backward using the S&P / Case-Shiller values, I was then able to estimate what a single-family home sold for in every other month, from 1987 to today. (Case-Shiller normalizes January 2000 to have a value of 100, with dates before and after that adjusted.) (Case-Shiller and The Warren Group use different data; The Warren Group is for all of Massachusetts, whereas Case-Shiller is the “metropolitan statistical area” around Boston. The Warren Group’s values are probably lower than Case-Shiller, since they use homes in western Massachusetts, whereas Case-Shiller is more eastern Massachusetts, plus as far north as New Hampshire.)

I pulled median household income data from the US Census Bureau. (None of my figures are adjusted for inflation, which makes sense, since your pay in 1990 had to buy a home in 1990 dollars.)

What does my analysis show?

In 1990, the median home sale was for $146,503. This equated to $1,026 per month in mortgage loan payments at a fixed-rate loan at 9.98%. The median household income was $36,952, so you’d pay 33.34% of your annual income on your loan (assuming a 20% down payment).

In 2000, the median home sale was for $201,351. This equated to $1,218 per month in mortgage loan payments at a fixed-rate loan at 8.32%. The median household income was $50,502(!), so you’d pay 28.94% of your annual income on your loan (assuming a 20% down payment).

In 2009, the median home sale was for $303,496. This equated to $1,425 per month in mortgage loan payments at a fixed-rate loan at 5.80%. The median household income was $64,057, so you’d pay 26.69% of your annual income on your loan (assuming a 20% down payment). (Unfortunately, I don’t have 2010 or 2011 median household income data.)

The key figure, obviously, is the interest rate. It’s come down from double-digits in the 1980′s. It’s at almost an historic low.

For those who are in the position to buy right now, it’s a golden opportunity to lock in the cost of housing for years into the future, for the cheapest amount possible in over two decades.

The average 30-year, fixed mortgage rate decreased to 4.32%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.7 point for the week ending August 11, down from 4.39 percent, last week. Last year at this time, the 30-year FRM averaged 4.44 percent, so rates are lower.

A $400,000, 30-year, fixed-rate mortgage at 4.32 percent would run you approximately $1984 per month in loan repayments. This is down from $2,000, last week, $16 per month less, and $12 less per month compared to last year, when it would have cost you $2,012 per month.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Renewed market concerns about the European debt markets led investors to shift funds into U.S. Treasuries, pushing long-term yields lower. Further, in its August 9th Federal Open Market Committee statement, the Federal Reserve noted that economic growth so far this year had been considerably slower than it expected and that overall labor market conditions had deteriorated in recent months, leading the Committee to conclude that an exceptionally low federal funds rate should be maintained at least through mid-2013. These developments helped to ease mortgage rates lower this week.

“Lower mortgage rates will help to maintain the high degree of home-buyer affordability in the market. The National Association of Realtors® reported that its affordability index over the past three quarters has indicated the highest affordability since the inception of the index in 1970.”

If you’re considering a home purchase this fall, now is the time to speak with a mortgage broker.

The average 30-year, fixed mortgage rate rose to 4.39%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.39 percent with an average 0.8 point for the week ending August 4, down from 4.55 percent, last week. Last year at this time, the 30-year FRM averaged 4.49 percent, so rates are lower.

A $400,000, 30-year, fixed-rate mortgage at 4.39 percent would run you approximately $2,000 per month in loan repayments. This is down from $2,038, last week, $38 per month less, and $24 less per month compared to last year, when it would have cost you $2,024 per month.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Treasury bond yields fell markedly after signs the economy was weaker than what markets had previously thought allowing fixed mortgage rates to follow this week with the 15-year fixed and 5-year ARM setting new historical lows. The economy grew 1.3 percent in the second quarter, which was below the market consensus forecast, and first quarter growth was cut to less than a quarter of what was originally reported. In fact, the first half of this year was the worst six-month period since the economic recovery began in June 2009. Moreover, consumer spending fell 0.2 percent in June, representing the first decline since September 2009.

“On a positive note, there were indications that the housing market is firming. Real residential fixed investments added growth to the economy in the second quarter after subtracting from growth over the first three months of the year. The CoreLogic® National House Price Index rose for the third straight month in June (not seasonally adjusted) and was the first three-month gain since June 2010. Finally, pending existing home sales rose for a second consecutive month in June and was up nearly 20 percent from June 2010 when the housing tax credits expired.”

Are you thinking of buying a home this fall? Talk to your mortgage broker today to find out your options for locking in a low rate.

Interestingly, jumbo rates are very low right now, compared to conforming loan rates, as the Wall Street Journal pointed out recently.

The spread between the average loan rates is just 0.43% right now. This is great news if you’re looking to buy soon.

What will happen later this summer and in the fall is unknown, but the common held wisdom is that the jumbo rates will rise. This is because:

Starting in October, the federal government will start easing its support of jumbo loans as large as $729,750, which it began as an emergency measure three years ago. The new limits will vary by location, but will drop to $625,500 in top-tier markets such as New York, Los Angeles and Washington, D.C.

I believe Boston’s limit will also drop to $625,500, but check with your mortgage lender.

Getting a larger loan with a great rate will also require you to have an excellent credit score and be able to put down at least 20% at closing. If you can, you may be able to get a great, fixed-rate loan that you could have only dreamed about.

The average 30-year, fixed mortgage rate rose to 4.60%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.60 percent with an average 0.7 point for the week ending July 7, up from 4.51 percent, last week. Last year at this time, the 30-year FRM averaged 4.57 percent, so rates are actually higher, although the spread is very small. Fortunately, for buyers, home prices haven’t gone up pretty much anywhere in the country, and probably went down, meaning buyers can get more home for the same money.

A $400,000, 30-year, fixed-rate mortgage at 4.60 percent would run you approximately $2,051 per month in loan repayments. This is up from $2,029, last week, $22 per month more, and $8 more per month compared to last year, when it would have cost you $2,043 per month.

Frank Nothaft, vice president and chief economist at Freddie Mac says,”Mortgage rates followed Treasury yields higher over the holiday week but remain quite affordable by historical standards. For instance, interest rates on all mortgages outstanding in the first quarter of this year averaged just under 6 percent. With today’s rates, these homeowners who have the ability to refinance could shave $169 per month in interest payments on a $200,000, 30-year fixed mortgage.”

I hope that Freddie Mac’s economist isn’t the kind of guy who spins the news in a positive way, regardless of trends. He’s right, rates are lower than before, but rising interest rates are what most people are scared about.

The 30-year fixed-rate mortgage (FRM) averaged 4.51 percent with an average 0.7 point for the week ending June 23, up from 4.5% last week. Last year at this time, the 30-year FRM averaged 4.58 percent.

A $400,000, 30-year, fixed-rate mortgage at 4.51 percent would run you approximately $2,029 per month in loan repayments. This is $3 more than last week and $17 in monthly savings compared to last year, when it would have cost you $2,046 per month.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Interest rates on 30-year fixed mortgages hovered around 4.5 percent for the fourth consecutive week following mixed reports on the strength of the economy. First quarter economic growth was revised up in the final estimate, but growth in consumer spending stagnated in May while April’s figure was revised downward; consumer expenditures account for roughly two-thirds of the nation’s gross domestic product.

“Meanwhile, there were some signs of improvement in the housing market. In April, the S&P/Case-Shiller® 20-city composite home price index rose 0.7 percent, representing the first monthly increase since July 2010. However, much of the improvement reflected the seasonal increase in homebuying over the spring-summer period. Pending existing home sales rebounded in May, exhibiting the largest monthly increase since November 2010.”

Conforming loan limits are scheduled to be reduced in the fall. This means those buying in the $400,000′s to $600,000′s may see higher rates at that time. Let me know if I can provide more information.

The average 30-year, fixed mortgage rate stayed at 4.50%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.50 percent with an average 0.8 point for the week ending June 23, the same as last week. Last year at this time, the 30-year FRM averaged 4.69 percent, so continued good news for buyers.

A $400,000, 30-year, fixed-rate mortgage at 4.50 percent would run you approximately $2,027 per month in loan repayments. This is the same as last week and $45 in monthly savings compared to last year, when it would have cost you $2,072 per month.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Mortgage rates were virtually unchanged this week amid further indications of a soft housing market. Although new construction on single-family homes ticked up in May from April, it was still below the overall pace set in 2010. Moreover, existing home sales fell 3.8 percent in May to the fewest since November 2010.

“The Federal Reserve also reiterated that the housing sector continues to be depressed in its June 22nd policy committee statement. The S&P/Case-Shiller® National Home Price Index fell 2.1 percent between the fourth quarter of 2010 and first quarter 2011. Based on a recent survey by MarcoMarkets of 108 professional forecasters taken in early June, the index is predicted to decline another 1.5 percent by the fourth quarter of this year.”

Mortgage loan rates are at historic lows. Unfortunately, with the economy seemingly stuck in time, not many people are taking advantage of this golden opportunity.