Checking the average mortgage rates reported by Freddie Mac, the MBA and Bankrate for the week of 4-2-2016…
For many, Saturday is a day of rest and relaxation. For me, it is time to write about mortgage rates…
Freddie Mac on Mortgage Rates:
Freddie Mac did not report any major changes to mortgage rates:
- 30 year fixed-rate mortgages averaged 3.71%
- This is the SAME as last week!
- Last year at this time, 30 year fixed-rate mortgages averaged 3.70%
- 15 year fixed-rate mortgages this week averaged 2.98%
- Last week, 15 year fixed-rate mortgages averaged 2.96%
- Last year at this time, the average 15-year fixed-rate mortgage rate was the same!
Check out the chart from Freddie Mac:
Sean Becketti, chief economist, Freddie Mac said:
Dovish comments by Federal Reserve Chair Janet Yellen on Tuesday triggered a rally in Treasury markets and drove the 10-year yield down 13 basis points from last week’s high. Yellen’s comments came too late to affect this week’s mortgage rate survey, and the 30-year mortgage rate remained unchanged at 3.71%. However, if the Fed’s cautious tone persists, mortgage rates may register the impact in subsequent weeks.
No one can predict the future or what the Fed may do. We will have to see what effect Yellen’s comments as well as the FOMC minutes that will be released next week will have on mortgage rates.
Bankrate on Mortgage Rates:
Bankrate.com also reported that rates decreased:
The average 30 year fixed rate mortgages decreased to 3.83% from 3.9%
The average 30 year fixed rate jumbo mortgages decreased to 3.76% from 3.81%
Bankrate did not publish their benchmark 15 year fixed rate this week. I am not sure if this was a mistake or they are no longer going to report this. No big deal as we are just keeping our fingers on the pulse on the direction mortgage rates are headed.
The MBA on Mortgage Rates:
Sadly the MBA reported that mortgage applications fell. However, their unadjusted Purchase Index was 21% higher than the same week last year.
The MBA also reported:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,000 or less) was 3.94% 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) was 3.82% for 80% LTV loans.
The average contract interest rate for 15 year fixed rate mortgages was 3.19% for 80% LTV loans.
The Take Away:
I mentioned Yellen’s comments and the need to see how the markets react to both her comments and the FOMC minutes next week.
Some of the other stuff that happened this week:
- Pending home sales rose
- ISM manufacturing was strong
- Unemployment increased slightly
- 215,000 added to payrolls in March
- Average hourly earning increased more than expected
- The participation rate improved to 63%
While good economic news usually translates into increasing mortgage rates, we cannot be too sure about it this time. Without knowing what the Fed may do, it really is hard to predict. Still, knowing that the economy is strengthening (in some ways) could mean a rise in mortgage rates should motivate some.
And as always, these are the average mortgage rates. What is possible for one person is pure fantasy for another. If you are truly serious about buying a home, it means setting your budget by talking to a mortgage professional BEFORE you start looking at homes in person.
There is nothing wrong with looking online at homes for sale in the Anderson SC area before you get a Pre Approval Letter. But once you are ready to start looking at homes in person, it means discussing your options with a mortgage broker.
I always suggest that you have an idea of a monthly payment that is comfortable for you BEFORE talking to the lender. Remember you will need to pay taxes, insurance and allow for maintenance costs or improvements. Your lender can help you set a maximum price based upon the monthly payment that best suits you.
Also be sure to discuss how much COLD HARD CASH you need for down payment, appraisals, closing costs etc. Sometimes (not always) the seller may agree to pay some of these. However, some things must be paid for in advance such as appraisals, surveys and inspections.
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.