Mortgage rates remained flat for most of September compared to August, according to the Federal Housing Finance Agency's (FHFA's) indices. The survey provides monthly information on interest rates, loan terms, and house prices by property type, loan type, and lender type.
According to the FHFA, the National Average Contract Mortgage Rate for the purchase of previously occupied homes by the Combined Lenders Index was one basis point down from 4.43 percent in August to 4.62 percent in September. While the average interest rate on all mortgage loans remained unchanged at 4.63 percent during the month, the interest rate on conventional 30-year fixed-rate mortgages of $453,100 or less were down one basis point to 4.77 percent in September.
The FHFA report indicated that effective interest rates on all mortgage loans increased one basis point to 4.72 percent in September and accounted for the addition of initial fees and charges over the life of the mortgage. The average loan amount declined by $12,500 to an average of $306,100 in September.
However, rates have been creeping up since October and according to Freddie Mac's latest Primary Mortgage Market survey, they inched forward by one basis point during the week to 4.86 percent. A year ago in October, the rate stood at 3.94 percent.
"Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just one basis point to 4.86 percent this week," said Sam Khater, Chief Economist, Freddie Mac. "We expect rates to continue to rise, which will put downward pressure on homebuying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition."
Freddie Mac, which also measures the 15-year fixed-rate mortgage and five-year Treasury-indexed hybrid adjustable-rate mortgage (ARMs) said that these rates also rose slightly from last week to 4.29 percent and 4.14 percent respectively.