Time once again for my weekly check on the average mortgage rates plus I am going to look at why rates have not risen as predicted…
Time once again to check out the average mortgage rates reported by Freddie Mac, the MBA and Bankrate. Plus this week I will wrap up by looking at why rates have not risen as much as many expected. So let’s jump right in!
Freddie Mac Reported:
- 30 year fixed rate mortgages averaged 4.13% with an average 0.6 point
- This is down from last week when it averaged 4.15%
- Last year at this time, 30 year fixed rate mortgages averaged 4.37%
- 15 year fixed rate mortgages averaged 3.23% with an average 0.5 point
- This is down from last week when it averaged 3.24%
- Last year ago at this time, 15 year fixed rate mortgages averaged 3.41%
Check out the mortgage rate chart from Freddie Mac:
The 30-year fixed-rate mortgage fell 1 basis point to 4.3%
The 15-year fixed-rate mortgage also fell 1 basis point to 3.4%
The average rate for a 30-year jumbo mortgage rose 4 basis points to 4.37%
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 4.33% from 4.32%, with points increasing to 0.20 from 0.16 (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) decreased to 4.23% from 4.24%, with points increasing to 0.26 from 0.16 (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 3.41% from 3.40%, with points increasing to 0.23 from 0.22 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
Somewhat a confusing report as some mortgage rates rose and some rates decreased. Adding to the confusion is the many predictions that rates would rise in 2014. Yet this has not happened.
One reason could be the low demand means lenders have to really compete to get business from home buyers.
The MBA reported that 54% of total applications were for refinances. And the really bad news is that the unadjusted purchase index is 17% lower than the same week one year ago. More people are refinancing than buying and the number of people buying is lower than it was at this time last year.
Fewer mortgage originations mean the volume of MBS has declined and this also helps to keep mortgage rates low. If the number of people buying homes is very small, then it means very few people are actually taking advantage of the opportunity available for home buyers today.
Another reason for mortgage rates not rising is the increase in demand for MBS from global investors. Just as the Fed started tapering their purchases, investors started buying more. Right now, there is more demand for mortgage-backed securities than supply and this has kept consumer mortgage rates from rising.
However, as the economy improves, mortgage rates will rise. We may not know exactly when or how quickly, but we do know that NOW is a great opportunity for home buyers.
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.