Discussing this week’s mortgage rate reports and looking at how rates are still low compared to the past!
Time once again to look at the mortgage rates reports for this week!
The FHFA reported:
Nationally, interest rates on conventional purchase-money mortgages increased from June to July, according to several indices of new mortgage contracts.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.60% for loans closed in late July, up from 4.59% in June.
The average interest rate on all mortgage loans was 4.61%, up from 4.59% in June.
The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.77%, up from 4.76% in June.
The effective interest rate on all mortgage loans was 4.71% in July, up from 4.69% in June. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
The average loan amount for all loans was $321,700 in July, down $12,200 from $333,900 in June.
Looking at the chart from FHFA, you can see that rates are much higher than they were one year ago. However, this chart does NOT show that mortgage rates are still low compared to the highs of the past.
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 4.52% with an average 0.5 point
- This is up from last week when it averaged 4.51%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.82%
- 15-year fixed-rate mortgages averaged 3.97% with an average 0.5 point
- This is down from last week when it averaged 3.98%
- Last year at this time, 15-year fixed-rate mortgages averaged 3.12%
Sam Khater, Freddie Mac’s chief economist, said:
The 30-year fixed-rate mortgage barely inched up this week, continuing the summer trend of essentially being flat. While sales and price growth have softened these last few months, this leveling of rates may be helping more buyers reach the market. Purchase mortgage applications this week were once again modestly above year ago levels.
Given the strength of the economy, it is possible for home sales to pick up even more before year’s end. The key factor will be if affordably-priced inventory increases enough to continue this recent trend of cooling price appreciation.
I hope Khater is correct that we could see an increase in home sales. However, he may be overly optimistic about more affordably priced homes coming to the market.
Now check out this chart showing Freddie’ 30-year fixed rate mortgage rates going all the way back to 1971:
Look at how high mortgage rates have been in the past. Think about this the next time someone talks about how rates are increasing…
The MBA reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.78% from 4.81%, its lowest rate since the week ending July 20, 2018, with points increasing to 0.46 from 0.42 (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) remained unchanged at 4.68% from the week prior, with points increasing to 0.30 from 0.28 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.24% from 4.25%, with points increasing to 0.48 from 0.47 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
Somewhat mixed signals from the MBA but as with ALL of these reports, these are the average rates. They may not reflect what is realistic or possible for every home buyer.
Looking at the long range chart of 30-year fixed rate mortgages shows that we are still in a period of low mortgage rates. If buying a home makes sense for you, you really need to talk to the mortgage lender of your choice to discuss your options.
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