Mortgage Rates Increase

“Purchase mortgage applications up nine percent from a year ago. The improved demand reflects the still healthy underlying consumer economic fundamentals such as a low unemployment rate, solid wage growth and low mortgage rates. While there has been a material weakness in manufacturing and consistent trade uncertainty, so far, the American consumer has proved to be resilient with solid home purchase demand,” says Sam Khater, Freddie Mac’s Chief Economist.

Freddie Mac reports the following national averages for the week ending Sept. 12:

  • 30-year fixed-rate mortgage averaged 3.56 percent with an average 0.5 point for the week ending September 12, 2019, up from last week when it averaged 3.49 percent. A year ago at this time, the 30-year FRM averaged 4.6 percent.
  • 15-year fixed-rate mortgage averaged 3.09 percent with an average 0.5 point, up from last week when it averaged 3.0 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent.

Source: Freddie Mac

Record Rates by Year’s End?

By the end of this year, the 30-year fixed-rate mortgage could drop to 3.3%, which would put this popular loan product near its lowest average since Freddie Mac began tracking back data 48 years.

Lawrence Yun, chief economist for the National Association of REALTORS®, made the prediction after seeing the latest Labor Department report last week, showing a slowing job market. “The economy is clearly weakening, and the employment conditions show a lagging indicator,” Yun says. “The soft job gains in August assures that the Federal Reserve will be cutting interest rates.”

 

Home Loan Rates Remain Low!

“Mortgage rates continued the summer swoon due to weaker economic data,” says Sam Khater, Freddie Mac’s chief economist. “While economic growth is clearly slowing due to rising manufacturing and trade headwinds, economic fundamentals are still solid for U.S. consumers. The unemployment rate is low, housing affordability is improving, home buyer demand is rising, and home price growth is stable.”

Freddie Mac reports the following national averages for the week ending Sept. 5:

  • 30-year fixed-rate mortgages: averaged 3.49%, with an average 0.5 point, falling from last week’s 3.58% average. Last year at this time, they averaged 4.54%.
  • 15-year fixed-rate mortgages: averaged 3%, with an average 0.6 point, dropping from last week’s 3.06% average. A year ago, 15-year rates averaged 3.99%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.30%, with an average 0.4 point, dropping from last week’s 3.31% average. A year ago, averaged 3.93%.
Source: Freddie Mac

7.4M Home Owners Lose Out by Not Refinancing

Recent reductions in the 30-year fixed-rate mortgage could net the population of borrowers big savings if they would refinance, according to Black Knight Financial Services’ latest Mortgage Monitor Report.

“Before the most recent reductions in the average 30-year mortgage interest rate, approximately 6 million borrowers met broad-based ‘refinancibility’ criteria,” says Trey Barnes, Black Knight’s senior vice president of Loan Data Products. “These criteria assume loan-to-value ratios of 80 percent or below, good credit, non-delinquent loan status, and current interest rates high enough that borrowers have an incentive to refinance. In light of where rates are today, and looking at borrowers with current notes at 4.5 percent and above, that population has now swelled to 7.4 million — almost a 25 percent increase. This is a relatively conservative assessment, though, as those with current rates of 4.25 percent to 4.5 percent could arguably benefit from refinancing as well. That group adds another 1.7 million borrowers to the population.”

A separate study by the National Bureau of Economic Research found in an analysis of 1 million fixed-rate mortgages that 20 percent of Americans who failed to refinance could have saved more than $45,000 in payments over the life of their loan. At the time of the study, average interest rates were around 4.3 percent. In recent weeks, the 30-year fixed-rate mortgage dipped below 4 percent, sinking to the lowest levels in more than a year, according to Freddie Mac. However, some home owners are struggling to refinance as their home values continue to recover.

Source: Black Knight Financial Services

Rates Haven’t Been This Low Since 2013

The 30-year fixed-rate mortgage took another dip this week, staying below the 4 percent threshold and keeping borrowing costs at the lowest rate in more than a year. It marks the fifth consecutive week that mortgage rates decreased.

Freddie Mac reports the following national averages for the week ending Oct. 23:

  • 30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.5 point, reaching a new low for the year and dropping from last week’s 3.97 percent. Last year at this time, 30-year rates averaged 4.13 percent.
  • 15-year fixed-rate mortgages: averaged 3.08 percent, with an average 0.5 point, dropping from last week’s 3.18 percent average. A year ago, 15-year rates averaged 3.24 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.91 percent, with an average 0.5 point, dropping from last week’s 2.92 percent average. Last year at this time, 5-year ARMs averaged 3 percent.

Source: Freddie Mac