Every day you hear about mortgage rates going up, going down, compared to this, compared to that.  What does it all mean to YOU as you look for a home in Central Ohio?  Anything?

The best we could do is take a look at two distinct moments in time. If we are comparing July’s conforming mortgage rates to today’s average rates, there’s a 1.5 percent difference in favor of homeowners.  That means the annual percentage rate on the loan (everything else being the same such as 720+ credit score, no points, etc. etc.) is less currently than it was last summer (though more than a few weeks ago).

Rate drops like that certainly can make a big differences in a household budget.  Look at these before-and-after payments, based on rates from the chart:

$150,000 mortgage ($144 savings/month)

• July 2008: $958 monthly
• February 2009: $814 monthly

$250,000 mortgage ($240 savings/month)

• July 2008: $1,597 monthly
• February 2009: $1,357 monthly

$350,000 mortgage ($335 savings/month)

• July 2008: $2,235 monthly
• February 2009: $1,900 monthly

Of course, the flip side of this story is that while mortgage rates fell through late-2008, the mandatory lender fees that accompanied them rose.  That lessened some of the benefits of getting lower rates, but certainly not all of them.

According to recent housing data, buyers are back writing contracts and listed homes are selling quickly.  Considering how mortgage rates have led monthly payments lower, maybe it shouldn’t be much of a surprise.

(Image courtesy: The Wall Street Journal)