Checking in on the average mortgage rates reported by the MBA and Freddie Mac the week ending 10-18-2013…
Let’s look at what happened this week with mortgage rates during this time of uncertainty because of the government shutdown:
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 4.28%
- This is up from last week when it averaged 4.23%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.37%
- 15-year fixed-rate mortgages this week averaged 3.33%
- This is up from last week when it averaged 3.31%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.66%
Check out the chart from Freddie Mac showing the average mortgage rates:
Frank Nothaft, vice president and chief economist, Freddie Mac said:
Fixed mortgage rates edged up leading to the federal budget deadline this week. Recent confidence measures depict some of the effects of the government shutdown and uncertainty of the budget impasse. For instance, consumer sentiment in October fell for the second straight month to the lowest reading since January, according to the University of Michigan.
Similarly, October’s home builder confidence fell to a four-month low. However, despite these downturns in confidence, mortgage applications rose for the second consecutive week as of October 11th, elevated by increases in applications for refinancing.
The Mortgage Bankers Association Reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.46% from 4.42%, with points decreasing to 0.31 from 0.44 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.51% from 4.45%, with points decreasing to 0.15 from 0.21 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53% from 3.52%, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80% loan-to-value ratio loans.
Mike Fratantoni, MBA’s Vice President of Research and Economics said:
The government shutdown had a notable impact on the mortgage market last week. Purchase applications for government programs dropped by more than 7% over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years. Conventional purchase applications dropped as well, but not to the same extent, falling almost 4% for the week.
The Take Away:
Well the good news is that the idiots in Washington finally averted economic disaster by stopping the government shutdown and kicking the can down the road regarding the debt ceiling. Sadly they really didn’t do much about solving the problems that caused all of this. But they did show America just how inept they are. Whether or not voters remember this during the next election is another story…
Both Freddie and the MBA reported increasing mortgage rates. Since this is during the time period that of uncertainty because of the government shutdown, it is possible that this week’s results have nothing to do with what will happen next week.
And with President Obama nominating Yellen to be the next Chair of the Federal Reserve Board, I doubt we will see any big changes regarding Quantitative Easing. Which should mean rates will remain low for the time being. I suggest reaching out to your mortgage professional to get their opinion on what they think rates are going to do.
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.