Looking at mortgage rates for the week of 4-25-2014…
Sorry about the lack of posts lately. I will be trying to get back into posting on a more regular schedule. Since writing about mortgage rates has been a Friday tradition around here, I figure that this post should be an easy way to get back into my groove.
So without wasting any more time, let’s dive into looking at this week’s average mortgage rates from Freddie Mac, the MBA and Bankrate.com!
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 4.33%
- This is up from last week when it averaged 4.27%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.40%
- 15-year fixed-rate mortgages averaged 3.39%
- This is up from last week when it averaged 3.33%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.61%
Frank Nothaft, vice president and chief economist, Freddie Mac said:
Mortgage rates edged up following the uptick in the 10-year Treasury note late last week. Existing home sales were essentially flat with a 0.2 percent decline in March to a seasonally adjusted annual rate of 4.59 million. However, new home sales fell nearly 15% in March to an annual rate of 384,000, well below consensus.
Check out the chart showing mortgage rates from Freddie Mac:
The 30-year fixed-rate mortgage rose 5 basis points to 4.48%
The 15-year fixed-rate mortgage rose 6 basis points to 3.54%
The average rate for a 30-year jumbo mortgage rose 4 basis points to 4.47%
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 4.49% from 4.47%, with points increasing to 0.50 from 0.32 (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 4.41% from 4.39%, with points increasing to 0.34 from 0.18 (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 3.55% from 3.54%, with points increasing to 0.33 from 0.24 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
We saw mortgage rates increase this week after several negative housing reports. Most people have been expecting or predicting that mortgage rates would rise in 2014. Especially after the Fed started to taper Quantitative Easing.
Yet we have not seen mortgage rates shoot upward quite like everyone thought they would. Why haven’t we seen the rapid increase like we did the first time the Fed mentioned tapering QE?
The fear was that if the Fed stopped buying mortgage-backed securities, there wouldn’t be anyone to take their place. So reduced demand would mean downward pressure on MBS prices. Which would translate into higher mortgage rates.
The unrest in the Ukraine could be the reason that rates have not skyrocketed yet. When we start seeing crazy stuff happening around the world, investors get nervous. So they start looking for somewhere safer to put their money.
Somewhere like US Treasuries. The increased demand for treasuries has been helping Mortgage-Backed-Securities and this helps keep mortgage rates low. Just remember that if the situation in Ukraine is resolved peacefully, it could mean we will see mortgage rates start to climb at a much faster pace.
Like they did when the Fed first mentioned tapering back in 2013.
The key thing to remember is that mortgage rates are STILL at historically low levels.
So if buying a home makes sense for you, my suggestion is to do it sooner rather than later.
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.