Looking at this week’s reports on mortgage rates with a reminder about what rates were like in the past…
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 4.90% with an average 0.5 point
- This is up from last week when it averaged 4.71%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.91%
- 15-year fixed-rate mortgages averaged 4.29% with an average 0.5 point
- This is up from last week when it averaged 4.15%
- Last year at this time, 15-year fixed-rate mortgages averaged 3.21%
Check out the chart:
When you look back 10 years, you can see that rates were MUCH higher in the recent past. If you missed last week’s post about mortgage rates, then you may not know that rates are still low compared to the past:
Sam Khater, Freddie Mac’s chief economist, said:
In this week’s survey, the 30-year fixed-rate mortgage jumped 19 basis points to 4.90 percent. Rates are now at their highest level since the week of April 14, 2011.
Rising rates paired with high and escalating home prices is putting downward pressure on purchase demand. While the monthly payment remains affordable due to the still low mortgage rate environment, the primary hurdle for many borrowers today is the down payment and that is the reason home sales have decreased in many high-priced markets.
Interesting that Khater is saying the primary hurdle is the down payment when I would say it is finding an acceptable home at the right price due to the lack of homes for sale in many areas of the country.
The Mortgage Bankers Association reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since February 2011, 5.05%, from 4.96%, with points increasing to 0.51 from 0.49 (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 $453,100) increased to its highest level since July 2011, 4.99%, from 4.93%, with points increasing to 0.35 from 0.31 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2010, 4.44%, from 4.39%, with points increasing to 0.58 from 0.50 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
Even higher mortgage rates reported by the MBA! Do NOT freak out because these are the average rates and you may qualify for lower rates.
The best thing to do is to sit down with several mortgage lenders to discuss your options and what is possible. Waiting or not talking to a lender at the beginning of your journey towards home ownership could prove to be costly or disastrous.