Time to look at the average mortgage rates for the week of 8-2-2014 and the news from this week that will be affecting rates…
Time to look at this week’s average mortgage rates and the news from this week that will be affecting rates. Like I said last week, it was this week’s news from the FED, the latest GDP and unemployment numbers that everyone should be watching. I also have the information from FHFA’s latest report on mortgage rates to cover so let’s dive right in!
FHFA Mac Reported:
Before I got into what FHFA reported, let me warn you that their data is not as up to date as the reports from Freddie Mac, the MBA and Bankrate.com.
What Did the FHFA Say?
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.08% for loans closed in late June. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.09% in June, a decrease from 4.13% in May.
Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, the June index reflects market rates from mid-to-late May. The effective interest rate was 4.24% in June, down 4 basis points from 4.28% in May. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed rate mortgages of $417,000 or less was 4.34% in June, a decrease of 3 basis points. The average loan amount for all loans was $292,200 in June, up $9,600 from $282,600 in May.
Now let’s move on to more recent data…
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 4.13%
- Last year at this time, 30 year fixed rate mortgages averaged 4.39%
- 15 year fixed rate mortgages averaged 3.23% with an average 0.7 point
- This is down from last week when it averaged 3.26%
- Last year at this time, 15 year fixed rate mortgages averaged 3.43%
Check out the mortgage rate chart from Freddie Mac:
The 30 year fixed rate mortgage was 4.28% which is the same as last week.
The 15 year fixed rate mortgage fell 1 basis point to 3.4%
The average rate for a 30 year jumbo mortgage rose 5 basis points to 4.39%
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 4.33%, with points increasing to 0.24 from 0.23 (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 4.22% from 4.21%, with points increasing to 0.23 from 0.20 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15 year fixed rate mortgages remained unchanged at 3.47%, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The bad news from the MBA was that their unadjusted Purchase Index is 12% lower than the same week one year ago. This means that fewer people applied for a mortgage to buy a home this week compared to the same time period one year ago.
The Take Away:
I am not sure we will see the FULL effect of this weeks news about GDP and the unemployment numbers until next week. The report on GDP was better than expected and rates did increase after GDP was reported at 4% for the 2nd quarter.
Despite 6 months of job growth of over 200,000 per month, investors still considered the July jobs report as being weak. That is why we did not see the average mortgage rates increase this week.
Normally, job growth means higher mortgage rates.
If we continue to see job growth and strong GDP numbers, we should expect mortgage rates to rise.
But there are so many other factors that come into play. The unrest with Israel and Gaza, the Ukraine, ISIS and Iraq. Heck even fears about a Ebola pandemic could affect mortgage rates.
But for now, home buyers can still take advantage of the great low mortgage rates. As a matter of fact, compare the mortgage rates of today to the past according to Freddie Mac:
There is no doubt that we are still looking at a great time to buy a home.
The question is if it is a great time for YOU to buy a home?
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.