Update on the mortgage rates for the week ending 5-21-2016…
Freddie Mac on Mortgage Rates:
No big changes in this week’s average mortgage rates from Freddie Mac:
- 30 year fixed-rate mortgages averaged 3.58%
- Last week, 30 year fixed-rate mortgages average 3.57%
- Last year at this time, 30 year fixed-rate mortgages averaged 3.84%
- 15 year fixed-rate mortgages this week averaged 2.81%
- This is the same as last week
- Last year at this time, 15-year fixed-rate mortgages averaged 3.05%
Check out the chart from Freddie Mac:
Sean Becketti, chief economist, Freddie Mac said:
The 10-year Treasury yield saw minimal movement over the past week, despite encouraging news from April’s consumer spending and CPI data. Accordingly, the 30-year mortgage rate moved up just 1 basis point from its 2016 low to 3.58 percent. Although there was minimal change in rates this week, the hawkish tone of Wednesday’s Fed minutes release had an immediate impact on Treasury yields, and could possibly shake up next week’s survey results.
I will discuss the Fed Minutes and more later in this post. But we need to check out what the MBA and Bankrate reported first!
Bankrate on Mortgage Rates:
Bankrate.com gave us mixed signals this week:
The average 30 year fixed rate mortgages increased to 3.76% from 3.75%
The average 30 year fixed rate jumbo mortgages increased to 3.78% from 3.77%
The average 15 year fixed rate mortgage decreased to 2.98% from 2.99%
The MBA on Mortgage Rates:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,000 or less) was unchanged at 3.82% 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 also unchanged at 3.74% for 80% LTV loans. This is down from the 3.74% reported last week.
The average contract interest rate for 15 year fixed rate mortgages was 3.02% for 80% LTV loans. This is down from the 3.06% reported last week.
The Take Away:
Well we got either no big changes or no changes at all in the average mortgage rates compared to last week’s report on mortgage rates.
As I mentioned last week, the Fed was indeed worth watching as they said they might raise their benchmark rate in June. Which caused the normal hysteria in the financial markets.
Mortgage rates didn’t change that much this week.
We all need to remember that the Fed doesn’t directly control mortgage rates. Also the rates above are just the average rates and do not reflect what is possible for everyone.
While it is possible that the Fed could raise their benchmark rate, I would be more concerned about rising home prices or analysis paralysis.
For those that think they can “time” the market and get a lower rate, I would say that the fact that wages are increasing:
Obviously we still have a long way to go but we have been slowly and steadily been moving upwards. I have been preaching for several years that we MUST have good paying jobs to have a healthy sustainable recovery in real estate.
But we are moving in the right direction…
Plus more people are working now compared to just a few years ago.
Yes, most of the jobs created in the past few years have NOT been true 40 hour a week with good wages & benefits types of jobs…
Some of the other good news from this week includes:
- US Existing home sales up 1.7% MoM and 6.6% YoY
- Bloomberg Consumer Comfort Index snapped back after the previous decrease
- CPI increased 03.4% MoM
- Housing starts rebounded
- Home builder confidence held steady
Mortgage applications did fall according to the MBA despite the STILL super low mortgage rates. And the 4 week average for jobless claims did increase slightly.
In general, there was more good economic news than bad.
As the economy improves, you can expect the average mortgage rates to increase.
I would suggest anyone that is serious about buying a home to to contact a mortgage lender ASAP.
The Fine Print: As always, I am providing this to you for informational purposes only! I am a blogger and REALTOR 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.