Let’s look at if the government shutdown had an effect on the average mortgage rates reported by the MBA and Freddie Mac for the week ending 10-4-2013…
Well the government might be shutdown but it is business as usual around here. And since it is Friday that means it is time to check in on the average mortgage rates reported by the MBA and Freddie Mac.
Freddie Mac Reported:
30-year fixed-rate mortgages averaged 4.22% with an average 0.7 point
This is down from last week when it averaged 4.32%
Last year at this time, 30-year fixed-rate mortgages averaged 3.36%
15-year fixed-rate mortgages this week averaged 3.29% with an average 0.7 point
This is down from last week when it averaged 3.37%
Last year at this time, 15-year fixed-rate mortgages averaged 2.69%
Frank Nothaft, vice president and chief economist, Freddie Mac said:
With the onset of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week. Consumer sentiment fell for the second month in a row in September to its lowest reading since April, according to the University of Michigan. Moreover, a recent Bloomberg survey of professional forecasters suggests that a partial federal shutdown lasting one week would shave 0.1 percentage points off of GDP growth in the fourth quarter and even more if the shutdown lasts longer.
Check out the chart from Freddie Mac showing the average mortgage rates:
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 4.49% from 4.62%, with points decreasing to 0.34 from 0.41 (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) decreased to 4.53% from 4.66%, with points decreasing to 0.22 from 0.29 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.55% from 3.68%, with points increasing to 0.33 from 0.28 (including the origination fee) for 80% loan-to-value ratio loans.
The Take Away:
I am sure that plenty of people are glad that mortgage rates have fallen again. But what good is a low rate if a lender can’t process your application? The government shutdown is going to have a negative effect on real estate if it drags on for very long.
Check out what David Stevens, President and CEO of the Mortgage Bankers Association said:
The federal government shutdown will have a growing impact on the housing market the longer it continues. If this shutdown is temporary, the ones affected most will be out of work federal employees. However the longer it goes, the greater impact it will have on borrowers, the housing market and the national economy.
I discussed the various problems that the shutdown will cause for real estate earlier this week in Closed for Business. No matter which side of the issue you are on, you need to know about the negative stuff. It isn’t all rainbows and unicorns around here after all.
If you are prepared for the potential problems, then you should be able to adjust. I am not saying it will be pleasant or easy. Maybe we will be lucky and the morons in Washington will get their act together before they really screw up the economy.
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.