Looking at the average mortgage rates reported by the MBA, Freddie Mac and Bankrate for the week of 3-28-2014 and mortgage rates for February from FHFA…
This week’s update includes the latest report from FHFA on mortgage rates in addition to the normal reports from the MBA, Freddie Mac and Bankrate.com. Let’s dive right in!
FHFA released their latest data on mortgage rates. So what did they report?
National data shows interest rates on mortgages decreased in February. Contract mortgage interest rates decreased 0.07% from January 2014 to February 2014.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.30% for loans closed in late February. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.22%, down 14 basis points from 4.36% in January.
Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, February data reflects market rates from mid-to-late January. The effective interest rate was 4.38%, down 14 basis points from 4.52% in January. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.45% in February, a decrease of 22 basis points. The average loan amount for all loans was $275,700 in February down $8,700 from $284,400 in January.
Check out the chart from FHFA:
REMEMBER this is for February 2014 and not as up to date as the reports from the MBA, Freddie Mac or Bankrate.com. Also, this data is from BEFORE the most recent statement from the Fed regarding QE.
Freddie Mac Reported:
- 30-year fixed rate mortgages averaged 4.40%
- This is up from last week when it averaged 4.32%
- Last year at this time, 30-year fixed rate mortgages averaged 3.57%
- 15-year fixed rate mortgages averaged 3.42%
- This is up from last week when it averaged 3.32%
- Last year at this time, 15-year fixed rate mortgages averaged 2.76%
Now check out the chart showing mortgage rates from Freddie Mac:
30-year fixed rate mortgages rose 5 basis point to 4.51%
15-year fixed rate mortgages rose 8 basis points to 3.56%
The average rate for a 30-year jumbo mortgage rose 7 basis points to 4.53%
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 4.56% from 4.50%, with points increasing to 0.29 from 0.26 (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 4.45% from 4.39%, with points decreasing to 0.27 from 0.19 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed rate mortgages increased to 3.62% from 3.52%, with points decreasing to 0.24 from 0.25 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
If we look at the most recent data, all of the mortgage rates increased. And check out this quote from a recent post from Freddie Mac:
One thing seems certain: we aren’t likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012.
But what many people are forgetting is that rates are STILL super low! Check out the chart from Freddie Mac:
I know that some of you may not have been born during some of the time periods in that chart. But it doesn’t change the fact that mortgage rates are still at historically low levels. Despite the rising mortgage rates and home prices it is still a great time for many people to buy a home.
Frank Nothaft, vice president and chief economist, Freddie Mac explained why we saw mortgage rates increase this week:
Mortgage rates rose following the uptick on the 10-year Treasury note after comments by the Federal Reserve Board Chair Janet Yellen indicated a possible increase in interest rates as soon as early 2015.
But look at that chart showing rates from the past. Look at the drastic difference in payments. With rates rising, the longer someone waits, the higher their payments could be.
This is certainly something all serious home buyers need to know about and consider. It does not mean everyone should rush out and buy the first home that fits their budget. Instead, they need to remember that time is money.
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.