Let’s look at the most recent reports on mortage rates from Freddie Mac, the MBA and Bankrate!
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 3.92% with an average 0.6 point
- This is down from last week when it averaged 3.97%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.66%
- 15-year fixed-rate mortgages this week averaged 3.19% with an average 0.5 point
- This is down from 3.26% last week
- Last year at this time, 15-year fixed-rate mortgages averaged 2.98%
Despite the Fed finally raising rates, we have NOT seen rates skyrocket. Sounds great until we think about why…
All of the recent economic turmoil is a big part of the reason that home buyers can still get a super low interest rate.
But it is also Treasury yields that are helping to keep rates low as Sean Becketti, chief economist at Freddie pointed out:
Long-term Treasury yields continue to drop, dragging mortgage rates down with them. Turbulence in overseas financial markets is generating a flight-to-quality which benefits U.S. Treasury securities. In addition, sagging oil prices are capping inflation expectations.
We did see some pretty scary economic news this week:
- Really weak retail sales
- Jobless claims rising
- The Empire State Manufacturing Survey collapsed
- Import and export prices still falling
- Industrial production fell
As I have said for a long time, a crappy economy is good for mortgage rates. Obviously a crappy economy is NOT good for much else…
Check out the mortgage rate chart from Freddie Mac:
30 year fixed rate mortgages decreased to 4.05%
15 year fixed rate mortgages were unchanged at 3.29%
30 year fixed rate jumbo mortgages decreased to 3.93%
The Mortgage Bankers Association Reported:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.12% from 4.20%, with points decreasing to 0.38 from 0.42 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 30 year fixed rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.02% from 4.09%, with points decreasing to 0.30 from 0.35 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15 year fixed rate mortgages decreased to 3.42% from 3.47%, with points remaining increasing to 0.39 from 0.31 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
Despite the weak economy, the MBA said that more people applied for a mortgage. The MBA’s purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week.
So do these people know something others do not?
Are they buying now before home prices rise any further?
Just like higher mortgage rates, increasing home prices also mean a higher monthly payment.
Speaking of increasing home prices, I will be posting the latest market reports starting late tomorrow night or Monday morning.
Both the monthly and the weekly updates so stay tuned!
The Fine Print:
As always, I am providing this to you for informational purposes only! I am not a mortgage lender and you should contact the lender of your choice directly to learn more about its mortgage products and your eligibility for such products.