Time to check the mortgage rates reported for the week of 8-16-2014 plus some advice about how a wait and see attitude could cost you more money…
Another week has flown by and that means it is time to check the mortgage rates reported by Freddie Mac, the MBA and Bankrate for this week. PLUS I will wrap it up with some advice about how a wait and see attitude could cost you more money.
So let’s jump right in!
Freddie Mac Reported:
- 30 year fixed rate mortgages averaged 4.12% with an average 0.6 point
- This is down from last week when it averaged 4.14%
- Last year at this time, 30 year fixed rate mortgages averaged 4.40%
- 15 year fixed rate mortgages averaged 3.24% with an average 0.6 point
- This is down from last week when it averaged 3.27%
- Last year at this time, 15 year fixed rate mortgages averaged 3.44%
Check out the mortgage rate chart from Freddie Mac:
30 year fixed rate mortgage rates fell 2 basis points to 4.27%
15 year fixed rate mortgage rates fell 1 basis point to 3.39%
The average rate for a 30 year jumbo mortgage fell 4 basis points to 4.35%
The Mortgage Bankers Association Reported:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.35%, with points unchanged at 0.22 (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 4.24% from 4.26%, with points decreasing to 0.19 from 0.35 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15 year fixed rate mortgages decreased to 3.48% from 3.51%, with points increasing to 0.30 from 0.28 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The Take Away:
I am sure that some buyers are thinking that with mortgage rates either decreasing or at least not increasing, they can take their sweet time.
There is a very good reason why that may NOT be the best option…
The reason that buyers should NOT waste time is because NAR recently said affordability hit the lowest level in 6 years.
Which doesn’t mean much without explaining what affordability means. NAR tracks whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent monthly price and income data.
In other words, affordability is a measure of home prices, mortgage rates and incomes. It shows how “affordable” homes are.
While the rate that home prices have been increasing has slowed lately, the fact is that home prices are STILL increasing in most areas. Of course real estate is local so you have to look at local real estate prices MORE than the reports about the entire US.
If we look at the June 2014 Market Report for Upstate SC
- Average Home Price UP 6.2%
- Median Home Price UP 5.3%
If we break it down even further and look at just the Anderson SC Market Report for June 2014, we see that the median home price has increased 7.6%.
As home prices increase, it means that some buyers will have to lower the price range of the homes they are able to buy.
Or it means that buyers will have a higher monthly mortgage payment.