Update on the average mortgage rates reported by the Mortgage Bankers Association and Freddie Mac for the week ending 9-6-2013…
Well it is Friday and considering I am sipping coffee and have some 5FDP cranked up I have to say life is good! However I am concerned still about the situation in Syria and what the idiots in Washington are going to do.
More importantly, I am concerned about the unemployment numbers that were just released. If the news regarding unemployment is seen as a positive sign, then is its possible that the Fed will start tapering QE.
The BLS said that the unemployment rate fell to 7.3%.
The number of jobs added was lower than expected…
Remember that if/when the Fed does start to wind down Quantitative Easing, mortgage rates should start climbing. We will have to wait to see how the Fed reacts to the unemployment numbers. Enough about what might be.
Let’s look at what we know for sure and check out the average mortgage rates reported this week by Freddie Mac and the Mortgage Bankers Association:
Freddie Mac Reported:
- 30-year fixed-rate mortgages averaged 4.57% with an average 0.7 point
- This is up from last week when it averaged 4.51%
- A year ago at this time, 30-year fixed-rate mortgages averaged 3.55%
- 15-year fixed-rate mortgages averaged 3.59% with an average 0.7 point
- This is up from last week when it averaged 3.54%
- Last year ago at this time, 15-year fixed-rate mortgages averaged 2.86%
Check out the chart from Freddie Mac showing mortgage rates:
Freddie says mortgage rates are back up, almost to their highs for the year. They say this is because recent data suggests we are seeing signs of a stronger economic recovery, as well as some positive news about housing and manufacturing.
Frank Nothaft, vice president and chief economist, Freddie Mac said:
Mortgage rates edged up this week on signs of a stronger economic recovery. Real GDP was revised upwards to 2.5 percent growth in the second quarter of this year. In addition, residential construction spending rose for a ninth consecutive month in July. Lastly, the manufacturing industry expanded by the fastest pace in August since June 2011.
The Mortgage Bankers Association Reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.73% from 4.80%, with points decreasing to 0.33 from 0.41 (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) decreased to 4.71% from 4.78%, with points decreasing to 0.25 from 0.34 (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 decreased to 4.48% from 4.52%, with points decreasing to 0.03 from 0.32 (including the origination fee) for 80% loan-to-value ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.75% from 3.84%, with points decreasing to 0.30 from 0.35 (including the origination fee) for 80% loan-to-value ratio loans.
The Take Away:
Again with the mixed signals as Freddie said average rates increased and the MBA said they decreased. But the REAL story comes from the latest unemployment numbers and how everyone is going to react. The numbers were weaker than expected. But is it bad enough to delay the Fed tapering QE?
The Federal Reserve is debating whether the economy has improved enough to warrant tapering QE. We will probably have to wait until after they meet on the 17-18th to find out for sure what the Fed is going to do. Of course…
Everyone should remember that rates are still super low!
Anyone suffering from analysis paralysis will just keep on waiting and watching until it is too late. Instead of twiddling your thumbs, look at what we know. Mortgage rates are still low but they are going to rise once the Fed starts to taper QE. Home prices are rising. If now is the right time to buy, then waiting or over analyzing will probably just cost buyers more money and time.
Remember, these are just the average rates and finding out exactly what is possible for you means talking to a lender. 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.