Tag Archives: Mortgage Rates

Mortgage rates shot up in the last week following remarks from the Federal Reserve that it may be tapering its bond purchases later this year. According to Freddie Mac's Primary Mortgage Market Survey, the average 30-year fixed-rate mortgage (FRM) rose to 4.46 percent (0.8 point) for the week ending June 27, an increase from only 3.93 percent last week and the highest figure since the week of July 28. The weekly increase is the largest since April 1987.

Mortgage applications continued to fall last week following a sizable spike in interest rates, the Mortgage Bankers Association (MBA) reported in its Weekly Mortgage Applications Survey. The Refinance Index fell 5 percent from the previous week, dipping to its lowest level since November 2011. The refinance share of total mortgage activity also declined, falling to 67 percent--the lowest level since July 2011. Meanwhile, the seasonally adjusted Purchase Index actually rose, increasing 2 percent.

An increase in prices itself does not signal a bubble. An unsustainable increase, not supported by other data, however, would.

Though rising mortgage rates and the current supply and demand situation present short-term difficulties for originators, Deloitte says the long-term picture is rosier.

A plurality of prospective homebuyers responding to an industry survey anticipate down payments of less than 15 percent when they purchase a new home. Forty-four percent of respondents anticipate low down payments of no more than 15 percent, while 34 percent foresee paying between 15 and 24 percent of purchase price at closing. Nineteen percent say they will put down more than 25 percent of their home purchase price when the purchase their next home, according to the survey conducted on behalf of LendingTree.

The 30-year fixed-rate mortgage (FRM) averaged 3.93 percent (0.8 point) for the week ending June 20, according to Freddie Mac.

Freddie Mac maintains in its latest U.S. Economic and Housing Market Outlook that rising mortgage rates shouldn't have a significant impact on housing affordability or the recovery for the time being.

After coming back for a short period, mortgage applications resumed their downward trend in June's second week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. The Market Composite Index, a measure of loan application volume, fell 3.3 percent on a seasonally adjusted basis for the week ending June 14. On an unadjusted basis, the index dropped 4 percent compared with the previous week. At the same time, mortgage rates continued to increase.

FNC's Residential Price Index shows prices rose 0.7 percent month-over-month in April, the largest acceleration since June 2012.

While experts at Capital Economics don't believe the recent rise in mortgage rates will be enough to derail the recovery entirely, it does bring some difficulties with it.