Update on the latest average mortgage rates from Freddie Mac & the Mortgage Bankers Association for 9-1-2012. Plus a chart from FHFA and what it means for you…
Time to check in on the average mortgage rates from Freddie and the Mortgage Bankers Association. Plus this week I have some information from FHFA including a big chart showing mortgage interest rates!
Earlier this week, the FHFA reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some adjustable rate mortgage contracts, was 3.66% based on loans closed in July 2012. There was a decrease of 0.01% from the previous month. Check out the chart:
Freddie Mac Reported:
- 30 year fixed rate mortgages averaged 3.59%
- This is down from last week when it averaged 3.66%
- Last year at this time, 30 year fixed rate mortgages averaged 4.22%
- 15 year fixed rate mortgages this week averaged 2.86%
- This is down from last week when it averaged 2.89%
- A year ago at this time, 15 year fixed rate mortgages averaged 3.39%
Frank Nothaft, vice president and chief economist of Freddie Mac said:
The housing market continued to show improvement over the past few months. New home sales rose 3.6 percent in July matching May’s pace as the strongest month since April 2010. Similarly, pending existing home sales also rose in July to its highest rate since April 2010. And, the S&P/Case-Shiller National Home Price Index rose 1.2 percent between the second quarter of 2011 and 2012, reflecting the first annual increase since the second quarter of 2010
The Mortgage Bankers Association Reported:
The average contract interest rate for 30 year fixed rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.80% from 3.86%, with points remaining unchanged at 0.42 (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 4.06% from 4.11%, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80% loan-to-value loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.60% from 3.62%, with points decreasing to 0.48 from 0.50 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15 year fixed rate mortgages decreased to 3.12% from 3.15%, with points remaining unchanged at 0.44 (including the origination fee) for 80% loan-to-value loans.
The Take Away:
For 4 weeks we kept seeing mortgage rates creep up. Good news for both buyers and sellers is this trend has stopped. Will mortgage rates drop or will they start to climb again. Hard to say but if we look at HSH.com’s 2-Month Forecast for Mortgage Rates we see that they are not predicting a big increase or decrease in mortgage rates.
So what is a buyer to do? Well, think about all the reports about home prices increasing. Lower rates do not help much if you have to pay more for a decent home.
Another very important thing to remember is that it isn’t just the mortgage rates that will affect you. Both Fannie and Freddie are going to raise their guarantee fees (g-fees) soon. As you can expect, the cost for this increase will probably be passed on down to consumers.
For buyers, I would suggest talking to your lender about these changes. Plus these are the average mortgage rates and you may be able to get a better rate or you might have to pay more. Plus, you really need to discuss all the various factors that affects you getting the best deal on your mortgage, how much down payment you need and much more. Besides, serious buyers determine their financing BEFORE they start looking at homes…
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.