Mortgage Rates Reach Highest Point of 2015

Fixed-rate mortgages moved higher this week, increasing to the highest level of the year, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reports the following for the week ending May 28:

  • 30-year fixed-rate mortgages: averaged 3.87 percent, with an average 0.6 point, rising from last week’s 3.84 percent average. Last year at this time, 30-year rates averaged 4.12 percent.
  • 15-year fixed-rate mortgages: averaged 3.11 percent, with an average 0.5 point, up from last week’s 3.05 percent average. A year ago, 15-year rates averaged 3.21 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.90 percent, with an average 0.5 point, increasing from last week’s 2.88 percent average. Last year at this time, 5-year ARMs averaged 2.96 percent.

Source: Freddie Mac

Mortgage Rates Take a Slight Dip This Week

Average fixed-rate mortgages moved slightly lower this week, a welcome reversal following three consecutive weeks of increases.

Freddie Mac reports the following national averages for the week ending May 21:

  • 30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.7 point, dropping from last week’s 3.85 percent average. Last year at this time, 30-year rates averaged 4.14 percent.
  • 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.6 point, dropping from last week’s 3.07 percent average. A year ago, 15-year rates averaged 3.25 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.88 percent, with an average 0.5 point, dropping from last week’s 2.89 percent average. Last year at this time, 5-year ARMs averaged 2.96 percent.

Source: Freddie Mac

FHA Fee Cuts Likely to Help More Home Buyers Qualify

Last week, the Federal Housing Administration announced it will cut its annual mortgage insurance premiums, likely resulting in about $900 in savings for borrowers and potentially opening the door to thousands of new buyers. But there are no further FHA fee reductions under consideration, Julian Castro, secretary of the U.S. Department of Housing & Urban Development, told a crowd at the National Press Club on Tuesday. The FHA decided to reduce its annual mortgage insurance premium fees from 1.35 percent to 0.85 percent because its Mutual Mortgage Insurance Fund for single-family programs was “back in the black.” In his speech, Castro cited National Association of REALTORS® research that estimated that nearly 400,000 creditworthy borrowers were being priced out of the housing market in 2013 due to the high premiums. “We expect our premium reduction to help more than 2 million borrowers save an average of $900 annually over the next three years,” Castro told the crowd. “It will also encourage nearly a quarter-million new borrowers to purchase their first home.” Source: “Castro: No Further FHA Fee Reductions Under Consideration,” HousingWire (Jan. 13, 2015)

Repeat Buyers: ‘Backbone of Housing Recovery’

The growing ranks of repeat home buyers accounted for 54 percent of existing-home sales in June, up from 49 percent just one year prior, according to the National Association of REALTORS®. Meanwhile, first-time buyers — who usually account for 40 percent of the market share — shrank to 29 percent in June. A lack of lower-priced homes and strict lending requirements are edging some first-time buyers out of the market. Therefore, call a local lender for loan information and qualification guidelines.

“What we’re seeing are these buyers who’ve waited around and who have finally realized this is a good time to move,” says David Crowe, chief economist for the National Association of Home Builders. “They will feed the demand until our economy gets a little more solid.”

Rising home prices are increasing household wealth and pushing more home owners to sell, either to trade up for bigger properties or to use the greater equity in their homes to put down a larger down payment for a comparable home, Bloomberg reports.

Source: “Home Sales Buoyed by Repeat Buyers,” Bloomberg (Aug. 11, 2013)