Update on the average mortgage rates reported by the Mortgage Bankers Association and Freddie Mac for the week ending 7-19-2013…
TGIF! Of course, since it is Friday that means that it is time to check out the average mortgage rates reported this week by Freddie Mac and the Mortgage Bankers Association.
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 4.37%
- This is down from last week when it averaged 4.51%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.53%
- 15-year fixed-rate mortgages this week averaged 3.41%
- This is down from last week when it averaged 3.53%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.83%
Frank Nothaft, vice president and chief economist, Freddie Mac said:
Fixed mortgage rates fell as Federal Reserve (Fed) Chairman Bernanke helped ease market concerns about the Fed reducing its bond purchases. During a question and answer session following a speech on July 10th, Chairman Bernanke indicated that a highly accommodative monetary policy is what’s needed in the U.S. economy.
Indications of a slowing in the economic recovery also placed downward pressure on mortgage rates. Consumer sentiment fell to a three month low in July while retail sales in June grew by only 0.4 percent, which was half of the market consensus forecast. In addition, housing starts fell in June to the slowest pace since August 2012.
The housing recovery keeps chugging along despite the recent market hysterics around Taper Talk which caused mortgage rates to jump over the past month. We won’t know the immediate impact on the pop in mortgage rates for another couple months. However, we don’t expect them to stall the housing recovery because demand is strong, supply is limited and housing affordability remains strong in most markets for most families.
Check out the chart from Freddie Mac showing the way rates have been up & down lately:
The Mortgage Bankers Association Reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) was unchanged at 4.68% with points decreasing to 0.42 from 0.46 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.81% from 4.86%, with points increasing to 0.40 from 0.37 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.38% from 4.37%, with points decreasing to 0.22 from 0.39 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.70% from 3.76%, with points decreasing to 0.38 from 0.41 (including the origination fee) for 80% loan-to-value ratio loans.
The Take Away:
Wow it sure is crazy how mortgage rates have been up and down lately. At least Bernanke didn’t say anything to make the markets go crazy at his recent press conference after the FOMC minutes were released.
While rates are higher than a year ago, they are still super low.
However, we know that at some point in the future the Fed will taper QE. Which means that rates could increase rapidly like they did recently at the mere suggestion that the Fed was going to taper Quantitative Easing.
Like I said in yesterday’s post, if I was going to buy a home I would try to do so BEFORE the Fed ends QE and mortgage rates start to really climb!
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.