Update on the average mortgage rates reported by the Mortgage Bankers Association and Freddie Mac for the week ending 8-23-2013…
Lots of drama this week since we got yet another hint from the Federal Reserve about tapering of quantitative easing. Which isn’t good since it means there is a strong possibility of higher mortgage rates. So let’s check out the average mortgage rates reported by Freddie Mac and the Mortgage Bankers Association.
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 4.58% with an average 0.8 point
- This is up from last week when it averaged 4.40%
- A year ago at this time, 30-year fixed-rate mortgages averaged 3.66%
- 15-year fixed-rate mortgages this week averaged 3.60% with an average 0.7 point
- This is up from last week when it averaged 3.44%
- A year ago at this time, 15-year fixed-rate mortgages averaged 2.89%
Sorry but no chart this week. Instead let’s look at some comments from Frank Nothaft, vice president and chief economist, Freddie Mac:
Fixed mortgage rates continued to follow bond yields higher leading up to the August 21st release of the Federal Reserve monetary policy committee’s minutes for July. In its July 30th and 31st meetings, the committee members were broadly comfortable with a plan to start reducing its bond purchases later this year, although a few emphasized the importance of being patient.
Meeting participants acknowledged mortgage rate increases might restrain housing market activity, but several members expressed confidence the housing recovery would be resilient in the face of higher rates. In fact, existing home sales increased in July to the strongest pace since November 2009 and homebuilder confidence in August rose to its highest reading since November 2005. Both increases occurred after mortgage rates had risen from their spring-time lows.
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 4.68% from 4.56%, with points increasing to 0.42 from 0.39 (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 $417,000) increased to 4.74% from 4.57%, with points increasing to 0.28 from 0.25 (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 4.40% from 4.25%, with points decreasing to 0.21 from 0.30 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.71% from 3.60%, with points decreasing to 0.32 from 0.35 (including the origination fee) for 80% loan-to-value ratio loans.
The Take Away:
Well, instead of being my normal smart & snarky self by saying I told you so, let me emphasize that these are just the average rates. Yes rates went up. And mortgage rates are probably going to increase even more in the coming weeks and months.
If you have been dragging your feet, it is time to get the lead out. If you just decided that buying a home makes sense for you, then you need to contact the lender of your choice ASAP. Delaying or wasting time is probably going to mean paying a higher rate.
Most buyers set their price range by the monthly payment. Increasing mortgage rates will mean that some buyers will have to lower their price range. Which is bad news for sellers since it could mean fewer buyers looking at your home.
I wish that I had better news.
But that my friends is the Ugly But Honest truth about mortgage rates this week!
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.