Looking at the mortgage rates reported by Freddie Mac, the MBA and Bankrate for the week of 4-16-2016…
Beautiful Saturday in Anderson and another interesting week for mortgage rates. Let’s dive right into looking at the average mortgage rates reported by Freddie, the MBA and Bankrate this week:
Freddie Mac on Mortgage Rates:
We saw another record low for mortgage rates in 2016 according to Freddie Mac:
- 30 year fixed-rate mortgages averaged 3.58%
- Last week, 30 year fixed-rate mortgages average 3.59%
- Last year at this time, 30 year fixed-rate mortgages averaged 3.67%
- 15 year fixed-rate mortgages this week averaged 2.86%
- Last week, 15 year fixed-rate mortgages averaged 2.88%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.94%
Check out the chart from Freddie Mac:
While this week’s decrease in rates was not as dramatic as last week, this makes buying or refinancing more attractive.
Freddie Mac chief economist Sean Becketti said:
Demand for Treasuries remained high this week, driving yields to their lowest point since February. In response, the 30-year mortgage rate fell 1 basis point to 3.58 percent. This rate represents yet another low for 2016 and the lowest mark since May 2013.
Now I am going to mention that IF Saudi Arabia follows through with their threat to dump US debt it could have a dramatic effect on rates. Maybe even more dramatic more than the hysteria the first time the Fed mentioned tapering QE.
However, we do NOT know IF the Saudis would or even could follow through with this threat. For years everyone has worried about China holding so much US debt but now it seems that the real threat could be another country…
Bankrate on Mortgage Rates:
Bankrate.com reported that 2 of the rates we watch decreased:
The average 30 year fixed rate mortgages decreased to 3.72% from 3.75%
The average 15 year fixed rate mortgages decreased to 2.99% from 3.01%
The average 30 year fixed rate jumbo mortgages increased to 3.69% from 3.68%
Bankrate also said that according to their mortgage rate index, 73% think rates will remain the same for the next week or so.
The MBA on Mortgage Rates:
The really good news from the MBA this week was that mortgage applications increased 10%. Not all of this increase was due to refinancing as the MBA’s purchase index was at the 2nd highest level since 2010!
As far as rates, the MBA reported:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,000 or less) was 3.82% for 80% loan-to-value ratio (LTV) loans. This is down from the 3.86% reported last week.
The average contract interest rate for 30 year fixed rate mortgages with jumbo loan balances (greater than $417,000) was 3.74% for 80% LTV loans. This is down from the 3.76% reported last week.
The average contract interest rate for 15 year fixed rate mortgages was 3.10% for 80% LTV loans. This is the 3rd week in a row that the 15 year mortgage rate has been the same.
The Take Away:
Once again we see mortgage rates decrease. But what else happened this week and what does it mean for mortgage rates?
First, we saw the number of people applying for unemployment fall to a level last seen way back in 1973. Obviously this is a good thing…
The Federal Reserve wants to see inflation higher before it raises interest rates again, but inflation seems to still be on the low side. This week, the Bureau of Labor Statistics said that the consumer price index rose by seasonally adjusted 0.9% YoY. Core inflation rose 0.1 MoM. I am not saying low inflation is good or bad but simply one of things the Fed is watching.
The Bloomberg Consumer Comfort Index did improve this week but small business optimism and consumer confidence both fell. So more negative than positive…
Something else that concerns me is that retail sales fell. With so much of our economy based upon people buying crap, any decrease in sales worries me. Especially when you combine the decrease in retail sales with the decrease in industrial production that was reported this week.
I would say the negative signals are outweighing the positives. I think this will keep mortgage rates low.
For how much longer is hard to say. And of course, I cannot guarantee anything…
But does it matter how low mortgage rates are if you do not take advantage of them?
I am sure some people are worried about buying a home when the economy is NOT super strong. However, the economy is better than it was and it is slowly getting better.
The thing to remember is that once the economy does fully recover, it will be too late to take advantage of these super low rates.
If buying a home makes sense for you today, I would say to get the lead out!
The Fine Print: As always, I am providing this to you for informational purposes only! I am a REALTOR and blogger in Anderson SC and not a mortgage lender. You should contact the lender of your choice directly to learn more about its mortgage products and your eligibility for such products. My suggestion is that ALL serious legitimate buyers take the first step and talk with a mortgage professional.