Checking in the average mortgage rates reported by the MBA, Freddie Mac and Bankrate.com for the week ending 1-31-2014. Plus a chart from FHFA showing rates…
It’s Friday and that means it is time to check out the average mortgage rates. Plus I have a big chart from FHFA to share along with some analysis and commentary based on recent news about consumer sentiment. Let’s dive in:
Despite this information being a little dated compared to the data I normally report, it is good to see as part of looking at the BIG Picture. FHFA said that interest rates on mortgages increased in December 2013. Contract mortgage interest rates increased 0.03% from November to December, according to an index of new mortgage contracts.
FHFA reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.25% for loans closed in late December. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.25%, up 3 basis points from 4.22% in November.
Check out the mortgage rate chart from FHFA:
Like I said, FHFA’s info is a little behind and I am not sure why their chart appears to stop at November 13th.
Freddie Mac Reported:
- 30-year fixed rate mortgages averaged 4.32%
- This is down from last week when it averaged 4.39%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.53%
- 15-year fixed-rate mortgages this week averaged 3.40%
- This is down from last week when it averaged 3.44%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.81%
Check out the chart showing mortgage rates from Freddie Mac:
- The 30-year fixed rate mortgage fell 6 basis points to 4.5%
- The 15-year fixed rate mortgage fell 5 basis points to 3.56%
- The average rate for a 30-year jumbo mortgage fell 9 basis points to 4.54%
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 4.52% from 4.57%, with points increasing to 0.40 from 0.36 (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) decreased to 4.47% from 4.57%, with points increasing to 0.27 from 0.18 (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 3.59% from 3.68%, with points decreasing to 0.26 from 0.29 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
Earlier this week we found out the Fed plans to taper or reduce their Quantitative Easing more. You may remember that when the Fed first mentioned cutting back on QE, mortgage rates spiked dramatically. Strangely, when the Fed did actually start tapering, mortgage rates did not increase.
And the same thing happened this week. Despite most experts thinking mortgage rates would increase after another reduction in QE, we saw mortgage rates decrease yet again.
I am sure for many people, lower mortgage rates is great news. But if we consider that rates are low and dipping because the economy is still weak, then it turns out to be a party pooper.
Earlier today, we found out the final Reuters / University of Michigan consumer sentiment index for January 2014 decreased from the December 2013 level. Even more interesting is that upper income households confidence improved but households with incomes less than $75,000 reported a decrease. Not too encouraging…
Add to this the number of First Time Home Buyers is at the lowest point since 2008. As much as I am fighting to stay positive for 2014 being even better than 2013 for real estate and the economy, news such as this is making it hard.
Of course, decreasing consumer sentiment has NOTHING to do with the fact that mortgage rates are still super low. Yes home prices have been increasing but they are still below the peak of a few years ago. So if it makes sense for you to buy a home, I would say you are blessed with extremely favorable home buying conditions.
If you are looking to sell a home, increasing prices and the low mortgage rates should be good news. You should be concerned about the dip in Consumer Sentiment since this could translate into fewer people looking to buy.
You can lead a horse to water, but you can’t make that horse realize how it is a good time to buy a home…
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.