Below is an excerpt from the latest Market Trends newsletter:
Mortgage rates held at record levels during the holiday-shortened week, as there was little strong economic data to move them around much.
Rates on the most popular types of mortgages held rather steady according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages was unchanged at 3.69 percent. Conforming 5/1 Hybrid ARM rates increased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.79 percent.
“Mortgage rates remain pretty flat as the summer doldrums have set in,” said Keith Gumbinger, vice president of HSH.com. “There’s not been much news to push them strongly in one direction or the other over the last couple of weeks; they are wandering aimlessly at the moment.”
Ah, the classic balance of supply and demand. When demand is high and inventory is limited, prices rise. That much we know. Yet we may have forgotten about that dynamic to a certain degree since we haven’t seen too much housing demand in recent years. However, demand is back in certain markets around the country.
The NAR announced on Thursday that existing home sales were down 1.5 percent in May. While Nick Timiraos of the Wall Street Journal described the change as “ho-hum,” and said “[prices] are still at a higher level than any month in 2011,” he noted that the real story behind the monthly sales report was that “demand is up” and “supply is down.”
A few weeks back, Keith Gumbinger, vice president of HSH.com, explained the importance of “consistent” mortgage rates. Sure, low mortgage rates matter, but consistent mortgage rates, coupled with the fact that they’re at historic lows, keep new borrowers coming in and their contracts in place.
“A long stretch of stable-to-falling rates allows potential homebuyers the time needed to research, plan and execute a transaction to buy a home without concern of a spike in rates, which can upset deals at a moment’s notice,” wrote Gumbinger in the May 28 edition of the Market Trends newsletter.
Back on May 29, we speculated that a summer homebuying season may be in the works. While we all know spring is traditionally the busiest season for the real estate market, mortgage-rate trends over the last few years, including this year, indicate that early summer is one of, if not the best time to lock in a mortgage rate.
Keith Gumbinger, vice president of HSH.com, summarized the recent summer mortgage-rate trend as an “incessant clang [that] appears to be serving as a wakeup call to potential homebuyers.”
The graphs and charts say it all. After a stable and optimistic first quarter, employment has once again begun to trend downward.
Only 69,000 new jobs were added in the U.S. last month, and the unemployment rate rose for the first time in nearly a year, finishing the month of May at 8.2 percent.
Rates on the most popular types of mortgages eased during the week ending April 3, according to HSH.com’s latest Weekly Mortgage Rate Radar.
The average rate for conforming 30-year fixed-rate mortgages fell by 6 basis points (0.06 percent) to 4.10 percent. Conforming 5/1 hybrid ARM rates decreased by 8 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.98 percent.
Rates on the most popular types of mortgages increased again in the past week, according to HSH.com’s latest Weekly Mortgage Rate Radar. The average rate for conforming 30-year fixed-rate mortgages rose by 3 basis points (0.03 percent) to 4.16 percent. Conforming 5/1 hybrid ARM rates increased by 5 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.06 percent.
“Although rates moved upward this week, the size of the increase is small,” said Keith Gumbinger, vice president of HSH.com. “It appears that the interest rates that most influence mortgages have settled back this week compared to last, so mortgage rates should ease back a little as the week progresses.”
Two recent reports from the National Association of Realtors indicate that home sales (existing and pending) are on the rise. But what if current mortgage rates weren’t as low as they are—how would home affordability, which directly influences home sales, be affected? Would we see fewer home sales?
Home affordability has three inputs: home prices, mortgage terms and income. Unless you’re buying a home with only cash, you’re going to need a mortgage and, as mortgage rates go, so does the cost of homeownership, explains loan officer and HSH.com contributing writer Dan Green.
We all know that the “most qualified” borrowers–those with the highest credit scores, solid incomes, strongest payment histories, and either a substantial equity stake or large down payments–have access to the best mortgage rates available.
But there’s another way borrowers can make sure they have access to the lowest possible mortgage rates: Read the rest of this entry »
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
