What's Ahead For Mortgage Rates This Week - Aug 11, 2014

Last week's housing related news was minimal, but a Federal Reserve survey of senior loan officers revealed that although credit standards for commercial and industrial loans as well as credit cards are easing, current mortgage credit standards are more stringent than in 2005. This could be a contributing factor to slowing housing market gains while other sectors of the economy are recovering at a faster pace.

Qualified Mortgage Rules Impact Non-Conforming Mortgages

The Senior Loan Officers survey also noted that qualified mortgage rules have slowed approval of prime jumbo mortgages and non-traditional home loans. This suggests that applicants falling outside of stringent qualified mortgage rules can expect challenges when buying or refinancing their homes.

In other housing news, Freddie Mac's Primary Mortgage Market Survey reported that last week's mortgage rates were mixed. Mortgage rates for a 30-year fixed rate mortgage averaged 4.14 percent with discount points of 0.70 percent against last week's reading of 4.12 percent with discount points of 0.60 percent. 15-year mortgage rates averaged 3.27 percent with discount points of 0.60 percent. This was an increase of four basis points, although discount points fell from 0.70 percent to 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was 2.98 percent, a drop of two basis points, with discount points unchanged at 0.50 percent.

Fewer Jobless Claims, Service-Related Business Growth Exceeds Expectations 

The weekly Jobless Claims report brought a lower than expected reading of 289,000 new claims as compared to predictions of 305,000 new jobless claims. In other economic news, the Institute for Service Management (ISM) reported that its non-manufacturing index rose from June's reading of 56.00 percent to 58.70 percent in July. Analysts had forecasted July's reading at 56.50 percent. July's reading represented the highest growth rate for service-related businesses since 2005.

According to the Department of Commerce, June factory orders rose by 1.10 percent over May's reading of -0.60 percent against an expected reading of 0.60 percent. As business expands and factory orders increase, it's likely that jobs and hiring will also grow. Steady employment is a compelling factor for most home buyers and positive reports in labor and industrial sectors could boost housing markets as more buyers increase demand for homes.

What's Ahead

Next week's economic reports include retail sales, retail sales excluding automotive, industrial production and the weekly reports on mortgage rates and new jobless claims. While there isn't much housing news expected next week, readings in other economic sectors can suggest potential trends in housing markets

What's Ahead For Mortgage Rates This Week - June 9, 2014

Last week's economic news was mixed. Construction spending grew, but fell below the expected level. CoreLogic reported that April home prices continued to rise, but did so at their slowest growth rate in more than a year. Employment reports for private sector and government jobs indicated fewer jobs, but the national unemployment rate was steady. Here are the details:

Construction Spending, Home Price Growth Slows

Construction spending reported by the Department of Commerce reached $953.5 billion annually, and increased by 0.20 percent month-to-month against expectations of an 0.80 percent increase and the March reading of 0.60 percent growth.

According to CoreLogic, the rate of home price growth slowed to 10.50 percent year-over-year in April as compared to the 11.10 year-over-year rate of increase in April 2013. Home prices increased by 2.10 percent over March; these gains in home prices were the slowest posted in more than a year, but there was good news.

No states posted a drop in home prices, and eight states posted new record highs for home prices.

CoreLogic said that although a short supply of available homes has driven home prices up, price gains lost momentum due to affordability; CoreLogic expects home prices to increase at a slower pace and projects that home price growth will reach a pace of 6.30 percent by April 2015.

Mortgage Rates Mixed

Freddie Mac reported that mortgage rates for fixed rate mortgages rose while the average rate for a 5/1 adjustable rate mortgage fell. The average rate for a 30-year fixed rate mortgage increased by two basis points to 4.14 percent; discount points fell to an average of 0.50 percent. The average rate for a 15-year fixed rate mortgage also increased by two basis points to 3.23 percent; discount points were unchanged at 0.50 percent. Rates for a 5/1 adjustable rate mortgage averaged 2.93 percent, a drop of three basis points. Average discount points rose from 0.30 to 0.40 percent.

Jobs, Unemployment Data Suggest Economic Strength

Labor markets impact consumer decisions to buy homes; several labor-related reports released last week indicated that the economy continued to gain strength as more jobs were added and fewer workers filed jobless claims.

ADP reported that 179,000 private-sector jobs were added in May as compared to 215,000 jobs added in April. The Bureau of Labor Statistics released its Non-farm Payrolls report for May; 217,000 jobs were added as compared to projections of 210,000 jobs added and 288,000 jobs added in April.

New weekly jobless claims were reported at 312,000 as compared to expectations of 311,000 new jobless claims and the previous week's 304,000 new claims. The four-week rolling average of weekly jobless claims fell by 2250 new claims to 310,250; this was the lowest reading since June 2007, and was 10 percent lower than the reading for the same week in April 2013 and was 17 percent lower than for the same week in 2012.

Another sign of economic growth was reported last week. Continuing jobless claims dropped to a seasonally-adjusted annual rate of 2.60 million for the week ended May 24; this was the lowest reading reported since October 2007.

The national unemployment rate for May matched April's reading of 6.30 percent, and was lower than projections of 6.40 percent for May. The Federal Open Market Committee of the Federal Reserve (FOMC) has repeatedly cited an unemployment rate of 6.50 percent as a benchmark indication of economic recovery; it appears likely that the Fed may continue its tapering of asset purchases as it winds down its quantitative easing program.

What's Ahead

This week's scheduled economic news includes Retail Sales, Retail Sales without vehicle sales, and the Producer Price Index. Freddie Mac mortgage rates and Weekly Jobless Claims will be released Thursday, and the University of Michigan will release its Consumer Sentiment Index on Friday.

What's Ahead For Mortgage Rates This Week - December 9, 2013

Last week brought several indicators of a strengthening economy. New home sales, private and federal employment and mortgage rates rose.

The Department of Commerce released construction spending numbers for October with mixed results. Although public projects fueled an 0.80 percent increase in month-to-month construction spending, residential construction fell by 0.60 percent.

Analysts had expected an increase of 0.50 percent and also noted that the negative effect of the government shutdown was a "blip." October's reading for construction spending was the highest since 2004.

CoreLogic released data that home prices rose by 0.20 percent, which represents a year-over-year growth rate of 12.50 percent for home prices. Pending home sales were suggested that November sales are expected to hold steady as compared to October, and projected year-over-year sales for November at 12.20 percent.

Slower growth in home prices was attributed to higher mortgage rates and a fear of a housing bubble in the West, where demand for homes far exceeds the number of available homes.

Not wanting to buy at the top of the current housing market, some potential buyers may be waiting for the talk of another housing bubble to subside before buying. Robert Shiller, co-author of the Case-Shiller Housing Market Index, noted that home buyers may not be "psychologically ready" for another housing bubble.

New home sales for October were higher than expectations of 419,000 homes sold on a seasonally-adjusted annual basis. October's reading of 444,000 new home sales was 21.60 percent higher than September's reading of 354,000 new homes sold. The national median home price fell by 4.50 percent to $245,800 in October; this was the lowest month-to-month reading since November 2012.

The number of available homes fell to a 4.90 month supply in October. This may cause buyers to put their home searches on hold as they wait out the winter months and hope for supplies of available homes to increase.

U.S. Employment Improving, Mortgage Rates Rise

ADP a private-sector provider of payroll services reported 215,000 new jobs added in November as compared to October's reading of 184,000 jobs added. Weekly jobless claims supported the ADP reading as new jobless claims fell to 298,000 against expectations of 325,000 new claims and a prior reading of 321,000 new claims. 

The Bureau of Labor Statistics brought more good news with its Non-Farm Payrolls report and Unemployment Rate for November. Non-Farm payrolls added 203,000 jobs in November against expectations of 180,000 jobs added and October's reading of 200,000 jobs added.

The National Unemployment rate dipped to 7.00 percent in November against expectations of a 7.20 percent reading and October's reading of 7.30 percent. The Federal Reserve has set a benchmark unemployment rate of 6.50 percent as an indicator of economic recovery.

Last week's strong economic news boosted mortgage rates; Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose by 17 basis points to 4.46 percent with discount points lower at 0.50 percent.

The average rate for a 15-year fixed rate mortgage also gained 17 basis points at 3.47 percent with discount points at 0.40 percent. The average rate for a 5/1 adjustable rate mortgage rose by 5 basis points to 2.99 percent with discount points at 0.4 percent.

What's Coming Up

This week's scheduled economic news includes Retail Sales, Weekly Jobless Claims and Freddie Mac's report of average mortgage rates.

What's Ahead For Mortgage Rates This Week - December 2, 2013

The short holiday week brought a flurry of economic reports last week. Highlights included pending home sales, the S&P Case-Shiller Housing Market Indices and the FHFA home price index. No reports were released on Thursday and Friday in observance of the Thanksgiving holiday.

The NAR released its Pending Home Sales report for October. Although pending home sales dropped by -0.60 percent, the decline was less than September’s reading of -4.60 percent.

NAR cited higher home prices and mortgage rates along with concerns over the then-pending government shutdown as factors that contributed to fewer pending sales. Pending sales are determined by signed purchase contracts and are considered an indication of future completed home sales and mortgage loan closings.

Department of Commerce reported that building permits issued increased from 974,000 in September to 1.03 million for October. Permits for multi-family dwellings rose by 17 percent from September, but permits for single-family homes rose by 1.00 percent.

A lagging supply of available single-family homes has been driving home prices up as demand also increases. The multi-family reading reflected the sector’s volatile nature and was largely concentrated in the West.

Case-Shiller And FHFA Report Higher Year-Over-Year Average Home Prices

The S&P Case-Shiller 20-City Housing Market Index for September reported its highest year-over-year gain in seven years, but the month-to-month reading was lower. The year-over-year reading was 13.30 percent in September and the month-to-month reading showed lackluster growth at 0.70 percent.

When seasonally adjusted, September’s reading was 1.00 percent against the seasonally-adjusted August reading of 1.90 percent.

In addition to the then-looming government shutdown, concerns over rapidly rising home prices in the West may have caused would-be buyers to sit on the sidelines as fears of another “housing bubble” gained traction.

Rising home prices also impact affordability and impact the ability of buyers depending on mortgage loans to compete with cash buyers.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, issued its housing market index report for September. Based on sales of homes financed with Fannie Mae or Freddie Mac-owned mortgages, FHFA’s report indicated that year-over-year home prices at an annual rate of 8.50 percent in September as compared to August’s year-over-year reading of 8.40 percent.

Economists noted that the increase of home prices is slowing due to a number of factors including higher mortgage rates and restrictive lending policies that are making it more difficult for buyers to purchase homes.

Analysts said that next year could bring a more sustainable rate of home appreciation with year-over-year readings averaging between five and eight percent.

Freddie Mac issued its weekly Primary Mortgage Market Survey on Wednesday; average mortgage rates for 30 and 15 year mortgages rose to 4.29 percent and 3.30 percent respectively.

Discount points for fixed rate mortgages were unchanged at 0.70 percent. The average rate for a 5/1 adjustable rate mortgage dropped by one basis point to 2.94 percent with discount points unchanged at 0.50 percent.

What’s Ahead

This week’s scheduled economic reports include Construction Spending, ADP Employment, New Home Sales and the Fed’s Beige Book. The Bureau of Labor Statistics will release its Non-farm Payrolls report and the national unemployment rate.

Weekly jobless claims and Freddie Mac’s Primary Mortgage Market Survey will be released as usual on Thursday.

What's Ahead For Mortgage Rates This Week: March 18th, 2013

Last week's positive employment reports were good news for the economy, which typically causes mortgage rates to rise, but mortgage rates ended the week lower.

As of Thursday, Freddie Mac reports that the average mortgage rate for a 30-year fixed rate mortgage was 3.63 percent with borrowers paying their closing costs and 0.8 percent in discount points.

The average mortgage rate for a 15 year loan was 2.79 percent with borrowers paying their own closing costs and 0.8 percent in discount points.

Strong Retail Sales Show Consumer Confidence Improving

In other economic news, retail sales for February surpassed Wall Street expectations and grew by 1.1 percent against predictions of 0.5 percent and January's reading of 0.1 percent.

Retail sales account for 70 percent of the U.S. economy and growing retail sales are a strong indicator of economic recovery, which generally causes mortgage rates to rise as bond prices including Mortgage Backed Securities fall.

With this strength in the retail sector, it may be a good time to consider locking interest rates for purchase and refinance transactions.

Results of Treasury auctions held Tuesday, Wednesday and Thursday were mixed.

Tuesday's auction of 3-year notes saw average demand, Wednesday's auction of 10-year notes was strong, and Thursday's auction of 30-year bonds drew a weak response.

Financial Reporting Strong Across Multiple Indices

The Producer's Price Index (PPI) for February met expectations at 0.7 percent and exceeded January's level of 0.2 percent.

The Consumer Price Index (CPI) for February came in at 0.7 percent and exceeded expectations of 0.5 percent and January's reading of 0.0 percent.

The Core CPI, which excludes food and energy sectors, demonstrates the impact of high fuel prices on the CPI with its lower numbers.

The Core CPI for February is 2.0 percent higher than for February 2012.

Upcoming Federal Reserve Meeting May Bring Interest Rate Changes

The Federal Reserve is not likely to modify its bond purchase program until the inflation rate reaches 2.5 percent.

Next week, the Federal Reserve will meet on Wednesday; investors will be waiting to see how the Fed responds to recent positive economic news in terms of potential changes to its bond purchase program, which is helping to keep mortgage rates lower.

As the deadline of March 27 for funding the Federal government approaches, investors will be following legislative talks to see how or if funding will be approved by the deadline.

What's Ahead For Mortgage Rates This Week: February 25th, 2013

A quiet past week in economic news caused mortgage rates to worsen slightly.

This week, however, will be packed with economic reports which may have an impact on interest rates going forward.

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose by 3 basis points from 3.53 percent to 3.56 percent with borrowers paying 0.8 in discount points and all of their closing costs.

The average rate for a 15-year fixed rate mortgage was unchanged from last week at 2.77 percent with borrowers paying 0.8 in discount points and all of their closing costs.

In other economic news, the Consumer Price Index (CPI) for January fell slightly to 0.0 percent as compared to Wall Street expectations of 0.1 percent and December’s reading of 0.1 percent.

The Core CPI, which measures consumer prices exclusive of volatile food and energy sectors, was 0.3 percent for January and surpassed analyst expectations of 0.2 percent and December’s reading of 0.1 percent.

Inflation Remains Low

These readings remain well below the 2.5 percent inflation level cited by the Fed as cause for concern.

According to the Department of Commerce, Housing Starts for January fell to 890,000 from December’s 954,000 and below Wall Street projections of 910,000.

These seasonally adjusted and annualized numbers are obtained from a sample of 844 builders selected from 17,000 newly permitted building sites.

Falling construction rates could further affect low supplies of homes reported in some areas; as demand for homes increase, home prices and mortgage rates can be expected to rise.

Full Economic Calendar This Week

This week's economic news schedule is full; Treasury auctions are scheduled for Monday, Tuesday and Wednesday. New Home Sales will be released Tuesday.

Fed Chairman Ben Bernanke is set to testify before Congress on Tuesday and Wednesday.

Wednesday's news includes the Pending Home Sales Index and Durable Orders.

Thursday's news includes the preliminary GDP report for Q4 2012, the Chicago Purchasing Managers Index, and weekly jobless claims.

Friday brings Personal Income and Core Personal Expenditures (CPE).

Consumer Sentiment, the ISM Index and Construction Spending round out the week's economic news.

What's Ahead For Mortgage Rates This Week : January 14, 2013

Mortgage rates rose last week nationwide during a week of sparse economic news.

Thursday's weekly jobless claims report showed 371,000 new claims, which was 1,000 fewer jobless claims than for the prior week. Wall Street expectations of 365,000 new jobless claims turned out to be too optimistic.

The semi-quarterly statement released Thursday by the European Central Bank (ECB) announced that the region's inflation remains below its 2 percent ceiling as established by central banker. Economic weakness in the Eurozone is expected to persist into 2013 with signs of recovery becoming evident toward the end of this year.

ECB cited financial and structural reforms as essential to economic recovery, and noted that national governments within the Eurozone have been slow to implement such reforms. Without such reforms, Euro-area economies may continue to struggle, which would likely lead investors to seek a safe haven in the bond market, moving bond prices higher.

As bond prices rise, mortgage rates nationwide typically fall.

Also last week, Freddie Mac's Primary Mortgage Market Survey reported the average rate for a 30-year fixed rate mortgage rising from 3.34 percent to 3.40 percent for buyers paying 0.7 percent in discount points plus closing costs. The average rate for a 15-year fixed rate mortgage rose from 2.64 percent to 2.66 percent.

Required discount points for the 15-year fixed rate mortgage rose from 0.6 to 0.7 percent.

Import prices for December released Friday were reported at -0.1 percent, below the consensus estimate of +0.1 percent. This report measures the prices of goods purchased in the U.S, but produced abroad and is considered an important indicator of inflationary trends affecting internationally produced goods.

Inflation tends to harm mortgage rates.

Next week's economic calendar is full of economic data and includes the release of the Producers Price Index (PPI), Retail Sales figures, the Consumer Price Index (CPI). The Fed is also set to issue its Beige Book report, and the NAHB Housing Market Index and Consumer Sentiment report will be released.

Mortgage rates remain low, but are rising.

What's Ahead For Mortgage Rates This Week : December 10, 2012

Mortgage bonds worsened last week as Fiscal Cliff talks moved closer to resolution and as the U.S. economy showed continued signs of growth.

Conforming mortgage rates rose slightly, edging off the all-time lows late in November.

According to Freddie Mac's weekly mortgage rate survey, the average 30-year fixed rate conforming mortgage rate was 3.34% last week for home buyers and refinancing households willing to pay 0.7 discount points at closing plus a full set of closing costs.

Freddie Mac also showed the 15-year fixed rate mortgage averaging 2.67% with an accompanying 0.7 discount points plus closing costs.

1 discount point is equal to 1 percent of your loan size.

The two big stories that moved rates worse last week were the Fiscal Cliff talks and the November jobs report.

With respect to the Fiscal Cliff, mortgage rates worsened as Capitol Hill moved closer to a deal which would avoid the dual-event of expiring U.S. tax break and a mandated government spending rollback. These events are both scheduled to occur December 31, 2012. 

Some analysts believe that these two events -- in unison -- could slow U.S. economic growth to the point of recession. Other analysts aren't so sure. However, Wall Street is choosing to be cautious. This is why a break in talks has been good for mortgage rate shoppers of late; and why steps toward avoiding one or both scenarios has been bad for rate shoppers.

Mortgage rates often rise when economic growth is expected. This explains why November's jobs report pushed mortgage rates worse Friday, too -- Wall Street underestimated the Non-Farm Payrolls report which showed 146,000 net new jobs created, and didn't expect to see the national Unemployment Rate drop to 7.7%.

This week, mortgage rates may rise again with new inflation data and a Retail Sales report set for release.

The big event, though, is the Federal Open Market Committee's 2-day meeting scheduled, set to begin Tuesday. The FOMC is not expected to add new economic stimulus, but the Fed's words can carry as much weight as its policies and actions.

The Fed will issue a statement to the markets at 12:30 PM ET Wednesday, and will host a press conference shortly thereafter. Mortgage rates are expected to remain volatile all week.

A Look At This Week's Mortgage Rates : December 3, 2012

Low mortgage rates are pumping up home affordability.

Average 30-year fixed-rate mortgage rates made a new all-time low in November, continuing this year Refinance Boom and giving fuel to the budding housing market recovery.

At month-end, Freddie Mac's survey of 125 banks nationwide put the benchmark product's rate at 3.32% for borrowers willing to pay 0.8 discount points. This is just 0.01 percentage point above the record-low rate establishing prior to Thanksgiving.

The 15-year fixed mortgage is similarly low, posting 2.64 percent nationwide, on average. This, too, is only slightly higher the all-time low set the week prior.

Falling mortgage rates have helped to offset rising home prices in many U.S. cities. 

Steady job creation and rising consumer confidence has swelled the pool of home buyers nationwide, causing home inventories to shrink and home prices to rise. The improving economy has also led to rising rents and now, within many housing markets, it's less costly to buy and own a home than to rent a comparable one.

A $1,000 mortgage payment affords a $225,000 mortgage payment.

Last week, the economy was shown to be improving.

• The Commerce Department showed that the Gross Domestic Product increased at a 2.7% annual rate in Q3 2012
• The Labor Department showed first-time unemployment filings dropping by 23,000 claims
• The Pending Home Sales Index jumped to its highest point since April 2010
• The Existing Home Sales report showed home sales up 2.1%
• The Case-Shiller Index showed home values making annual gains 

In addition, Federal Reserve Ben Bernanke said that the central bank will take action to speed economic growth, should the U.S. economy start to side-step. 

This week, there is little on the U.S. economic calendar, save for Friday's Non-Farm Payrolls report. Wall Street is expecting to see 80,000 net new jobs created in November, and a rise in the national Unemployment Rate to 8.0%.

If the report's actual results are stronger-than-expected, mortgage rates will likely climb from their all-time lows. If the report comes back weak, rates should stay unchanged.

What's Ahead For Mortgage Rates This Week : October 22, 2012

Mortgage markets worsened last week as hope for a European economic rebound and stronger-than-expected U.S. economic data moved investors out of mortgage-backed bonds.

Mortgage rates all of types -- conventional, FHA and VA -- lost ground last week, harming home affordability reducing purchasing power nationwide.

Rising rates also thwarted would-be refinancing households hoping to time a market bottom.

The increase runs counter to Freddie Mac's weekly Primary Mortgage Market Survey which showed the average 30-year fixed rate mortgage rate dropping 2 basis points to 3.37% nationwide.

This contradiction occurred because Freddie Mac's weekly mortgage rate survey is conducted Monday through Wednesday, and because the majority of the surveyed banks reply to Freddie Mac on Tuesday. As a consequence, Freddie Mac failed to capture this week's mid-week movement that took mortgage bonds to a one-month worst.

Access to Freddie Mac mortgage rates is for "prime" borrowers and requires payment of discount points plus closing costs.

This week, mortgage rates may rise again. There is a lot of news on which for Wall Street to trade, beginning with the week's biggest story -- the Federal Open Market Committee's 2-day meeting scheduled for Tuesday and Wednesday.

At the FOMC's last meeting, the Federal Reserve introduced a third round of qualitative easing (QE3), a program through which the Fed will work to keep mortgage rates low until the economy's recovery is more complete.

The Fed is expected to announce no new stimulus in this, its seventh of eight scheduled meetings for 2012, however, mortgage rates are typically volatile in the hours after the FOMC adjourns.

New housing data is set for release this week, too.

Wednesday, the U.S. Census Bureau will release September's tally of New Home Sales. Given the recent strength in Housing Starts and rising confidence among the nation's home builders, New Home Sales may best analyst calls for 385,000 new home sold last month on a seasonally-adjusted, annualized basis.

Strength in housing has recently correlated with rising mortgage rates.

The housing market's forward-looking Pending Home Sales Index is released Thursday.

Buyers Win 6.6 Percent Increase In Purchasing Power

Mortgage rates continue to troll near all-time lows, boosting the purchasing power of home buyers statewide.

According to Freddie Mac's most recent Primary Mortgage Market survey, the average 30-year fixed rate mortgage is now 3.39 percent nationwide, just three ticks off an all-time low. At the start of last quarter, 30-year fixed rate mortgage rates averaged 3.62 percent.

One year ago, they averaged 4.12%.

When mortgage rates are falling, they present home buyers with interesting options. Because of lower rates, buyers can choose to tighten their household budgets, buying an ideal home but paying less to own it each month. Or, for buyers who shop for homes by "monthly payment", falling mortgage rates put more homes with affordability's reach.

As a real-life example, for a buyer whose monthly principal + interest mortgage payment is limited to $1,000 per month, and whom opts for a 30-year fixed rate mortgage, as compared to January of this year, the maximum property purchase price has climbed 6.6%, or $14,000 in list price.

Consider this comparison:

• January 2012 : A payment of $1,000 afforded a maximum loan size of $211,756
• October 2012 : A payment of $1,000 affords a maximum loan size of $225,771

The 6.6 percent increase in affordability outpaces this year's rise in home prices and is one reason why the U.S. housing market is improving. Slowly and steadily, the U.S. economy is improving and "good deals" in housing are becoming harder to find. In addition, because homeownership is now less expensive than renting in many U.S. cities, home demand among buyers continues to rise.

For today's home buyer, market conditions appear ripe. Mortgage rates are near all-time lows, low-downpayment mortgage program remain plentiful, and home values have been rising since late-2011. Within 6 months, rates may be up and homes prices, too. Purchasing power would decline, decreasing home affordability nationwide.

The best "deals" in housing, therefore, may be the ones you find today.

What's Ahead For Mortgage Rates This Week : October 15, 2012

Mortgage markets improved slightly last week. With a dearth of new U.S. economic data due for release, investors turned their collective attention to the Europe, China, and the Middle East.

U.S. mortgage rates fell slightly in the holiday-shortened week.

The combination of civil protests, economic slowdowns, and growing political tensions caused investors to dump risky assets in favor of the relative safety provided by the U.S. mortgage bond market.

According to Freddie Mac, the average conforming 30-year fixed rate mortgage is now 3.39% nationwide for borrowers willing to pay 0.7 discount points plus a full set of closing costs. 0.7 discount points is a one-time closing cost equal to 0.7 percent of the borrowed loan size.

As an illustration, a bank's charge of 0.7 discount points on a $100,000 mortgage would cost $700 to the borrower.

Freddie Mac also reported the average conforming 15-year fixed-rate mortgage rate at 2.70% nationwide with an accompanying 0.6 discount points plus closing costs. Loans with zero discount points carry a higher mortgage rate average.

This week, data returns to Wall Street as a series of housing reports are slated for release, in addition to inflationary reports such Tuesday's Consumer Price Index (CPI).

The week begins with Retail Sales, released at 8:30 AM ET Monday. On a strong figure, mortgage rates are expected to climb. This is because Retail Sales data is closely tied to consumer spending and consumer spending accounts for more than two-thirds of the U.S. economy. 

A growing economy tends to pull mortgage rates higher.

Tuesday's CPI may do the same.

Inflation erodes the value of a mortgage bond so when inflation pressures grow, demand for mortgage bonds fall which, in turn, causes mortgage rates to rise. If CPI is higher-than-expected, mortgage rates will likely rise.

Then, there's a flurry of housing data. The Housing Market Index (Tuesday), Housing Starts (Wednesday) and Existing Home Sales (Friday) all hit this week. Strength in housing may lead mortgage rates higher, harming home affordability for today's home buyers.

At today's mortgage rates, every 1/8% increase raises monthly mortgage payments roughly $7 per $100,000 borrowed. 

30-Year Fixed Rate Mortgage Drops To 3.49% -- An All-Time Low

For the first time in 9 weeks, mortgage rates have made new lows.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage rate fell 6 basis points to 3.49% this week, tying the all-time low set in late-July. The 15-year fixed rate mortgage also dropped, moving to 2.77%. This, too, marks an all-time low.

The Federal Reserve's plan to pressure mortgage rates down may be working.

However, depending on where you live, your access to these all-time rates may be limited. This is because the Freddie Mac "published rate" is a national average based on the government-backed group's survey of more 125 banks.

Mortgage rates can vary by region.

For example, this week, mortgage applicants in the West Region are most likely to get the lowest rates of anyone.

In the West Region, 30-year fixed rate mortgage rates are averaging 3.43 percent with an accompanying 0.6 discount points. By contrast, applicants in the Southeast Region are most likely to get the highest rates with the 30-year fixed rate mortgage is averaging 3.53% with an accompanying 0.7 discount points.

1 discount point is a fee equal to one percent of your loan size. Loans with more accompanying discount points pay higher total closing costs.

This week's record-low rates are a boon to home affordability and, as compared to last September, mortgage rates are much improved :

• September 2011 : Average rate of 4.09%
• September 2012 : Average rate of 3.49% 

Over the past 12 months, this 60-basis point mortgage rate improvement has increased the maximum purchase price of a home buyer by roughly 7%. Home prices, however, may soon catch up.

Earlier this week, the Census Bureau reported Housing Starts at a multi-year high and the Existing Home Sales report from the National Association of REALTORS® showed the same. Housing is in recovery and prices are on an upward trajectory.

Take advantage of low mortgage rates while they last. Talk to your loan officer today.

What's Ahead For Mortgage Rates This Week : September 10, 2012

Mortgage markets worsened slightly in last week's holiday-shortened week. As expected, Wall Street took its cues from Europe and from the U.S. jobs market, and mortgage rates moved across a wide range.

Home buyers and would-be refinancing households were greeted with wildly varying mortgage rates, depending on which day they loan-shopped.

According to Freddie Mac's weekly mortgage rate survey, 30-year fixed rate mortgage rates averaged 3.55% nationwide last week, with an accompanying 0.7 discount points.

That is, until Thursday's meeting of the European Central Bank. 

The ECB is similar to the Federal Reserve in that, among its primary functions, it provides liquidity to banking systems in times of crisis. Thursday, the European Central Bank intervened with force.

To aid Spain and Italy, the third- and fourth-largest Eurozone economies, the European Central Board launched a bond-buying program meant to reduce speculation that the two nations -- and the Euro itself -- would fail.

The move calmed investors and sparked a broad equities market rally.

U.S. mortgage rates did not fare so well, however, climbing as much as 0.25% and leaving that "Freddie Mac mortgage rate" in the dust. If you tried to lock a loan Thursday, you may have been greeted with a rate nearing 4.000 percent.

Fortunately, those rising rates were short-lived.

Friday morning, the U.S. Bureau of Labor Statistics released its August Non-Farm Payrolls report and mortgage rates dropped. Far fewer jobs were created in the U.S. than was expected. 96,000 net new jobs were made in July. Wall Street had expected 130,000. This increases the likelihood of new Fed-led stimulus -- perhaps as soon as this week.

The Federal Open Market Committee meets for the 6th of eight times this year later this week; a 2-day get-together scheduled for September 12-13. The Fed may announce a new round of market stimulus. If it does, mortgage rates should fall. If it doesn't, mortgage rates may rise.

Other news affecting potential housing payments this week includes the release of key inflation data Thursday and Friday, and Friday's Retail Sales data.

Mortgage Rates Drop For The First Time In 4 Weeks

After 4 weeks of rising costs, mortgage rates finally recede.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage rate dropped 7 basis points to 3.59% this week. Depending on where you live, however, you may find that your offered mortgage rates varies. Freddie Mac's "published rate" is a national average based on a survey of more 125 banks.

The rates you receive as an individual vary by bank, and vary by region.  

Mortgage applicants in the North Central Region were most likely to get the lowest rates of all applicants nationwide last week. By contrast, applicants in the Southeast Region were most likely to get the highest rates.

Average mortgage rates in the five U.S. regions, as tracked by Freddie Mac :

• Northeast Region : 3.59 percent for a 30-year fixed rate mortgage
• West Region : 3.58 percent for a 30-year fixed rate mortgage
• Southeast Region : 3.64 percent for a 30-year fixed rate mortgage
• North Central Region : 3.57 percent for a 30-year fixed rate mortgage
• Southwest Region : 3.61 percent for a 30-year fixed rate mortgage

Across all 5 regions, mortgage rates were quoted with an accompanying 0.6 discount points, on average, plus a full set of closing costs. 1 discount point is equal to one percent of your loan size. Closing costs vary by county.

One year ago, the 30-year fixed rate mortgage rate averaged 4.22%. Today, it averages 3.59%. This 63 basis point difference yields a $36 monthly savings per $100,000 borrowed. 

On a $250,000 mortgage, that's $1,080 in savings per year.

If watched mortgage rates rise through August and felt as if you missed the market bottom, consider this week your second chance. The 30-year fixed rate mortgage does remains above its all-time low of 3.49 percent, but this week's drop in rates in encouraging. It's the biggest one-week drop in rates in more than 3 months.

Talk to your loan officer about how today's mortgage rates can work for your budget. 

Mortgage Rates Rise For Third Straight Week

Mortgage rates keep on rising.

According to Freddie Mac's weekly Primary Mortgage Market Survey, for the third straight week, the 30-year fixed rate mortgage rate rose, this time tacking on 3 basis points on a week-over-week basis to 3.62%, on average, nationwide. The 3.62% mortgage rate is available to mortgage applicants willing to pay 0.6 discount points plus a full set of closing costs.

Freddie Mac's published mortgage rates are compiled from a 125-bank survey.

Looking back, it appears that national 30-year fixed rate mortgage rates bottomed at 3.49% in late-July. In the weeks leading up to that bottom, mortgage rates had dropped in 11 of 12 weeks. Since then, however, mortgage rate have increased steadily, climbing to a 7-week high, depending on where you live. 

Mortgage rates vary by region. As reported by Freddie Mac, mortgage applicants in the South Region are currently paying the highest rates. Applicants in the North Central are paying the lowest.

• Northeast Region : 3.62% with 0.6 discount points
• West Region : 3.59% with 0.6 discount points
• Southeast Region : 3.68% with 0.6 discount points
• North Central Region : 3.58% with 0.6 discount points
• Southwest Region : 3.66% with 0.6 discount points

Mortgage rates don't figure to drop in the coming weeks, either. The same forces that drove mortgage rates down between January-July of this year are the same ones that are driving rates up today -- expectations for new Federal Reserve-led stimulus.

Earlier this year, the economy was stalling; growing slowly, but not convincingly. This led to Wall Street speculation for the Federal Reserve to implement a bond-buying program that would lead mortgage rates down, among other outcomes. The Fed repeated comments that it would do what is necessary to keep the economy on track only served to fuel such speculation.

Last month, however, at the Federal Open Market Committee, Ben Bernanke & Co. did not add new stimulus, and seemed content to take a "wait-and-see" approach with the economy. Since then, Europe appears to have put itself on-track and the U.S. economy has shown signs of expansion.   

The August rise in rates is Wall Street reversing its bets; planning for no new stimulus at all.

Mortgage rates remain low, though. If you've yet to join this year's refinance boom, or if you're hunting for a home, consider locking something in. In a few weeks, mortgage rates may be higher still.

Freddie Mac 30-Year Fixed Rate Mortgage Rates Rises To 3.55%

Mortgage rates couldn't fall forever, it seems.

This week, for the first time since mid-June, the 30-year fixed rate mortgage rate climbed on a week-over-week basis, moving 6 basis points to 3.55%, on average, nationwide.

According to Freddie Mac, 3.55 percent is the highest average rate at which the benchmark product has been offered in close to 4 weeks.

The Freddie Mac published mortgage rate is available for prime borrowers willing to pay a full set of closing costs plus an accompanying 0.7 discount points.

Discount points are a one-time, upfront mortgage loan fee to be paid at closing where 1 discount point is equal to one percent of your loan size. In this way, a home buyer who pays one discount point at closing will be responsible for an additional $1,000 in closing costs per $100,000 borrowed.

However, although Freddie Mac says that the average mortgage rate is 3.55%, not everyone who applies for a conforming mortgage will get access to that rate. This is because Freddie Mac's published rates are the ones offered to "prime" borrowers, the definition of which often includes :

• Top-rated credit scores, typically 740 or higher
• Verifiable income using two year's of tax returns 
• Home equity of at least 25%

Borrowers not meeting the above criteria should expect slightly higher mortgage rates and/or discount points. In some cases, such as when an applicant's credit score is below 680, mortgage rates may be higher by as much as 0.500%.

Although mortgage rates are up this week, though, the impact on home affordability is muted. Mortgage payments rose just $3 per month per $100,000 borrowed this week as compared to last week. 3.55% remains the third-lowest Freddie Mac rate of all-time.

Mortgage rates remain unpredictable and there's no guarantee for low rates to last forever -- much less through August. If today's mortgage rates meet your needs, therefore, consider locking something in.

Mortgage Rates Down 1 Percent In One Year

Another week, another new low for mortgage rates. 

According to Freddie Mac's weekly Primary Mortgage Market Survey, the 30-year fixed rate mortgage rate fell 3 basis points to 3.53% last week nationwide. The 3.53% mortgage rate is available to mortgage applicants who are willing to pay 0.7 discount points, on average, plus a full set of closing costs.

One year ago, the 30-year fixed rate mortgage rate was 4.52%. Today, it's nearly one percent lower. For every $100,000 borrowed at today's rates as compared to July 2011, a mortgage applicant will save $57 per $100,000 borrowed, or $684 per year.

Over 30 years of a loan, those savings add up.

30-year fixed rate mortgage rates have now dropped through 5 consecutive weeks, and in 11 of the last 12 weeks, a streak dating back to late-April. Depending where you live, however, you may not get access to 3.53% mortgage rates. As Freddie Mac's survey reveals, mortgage rates vary by region.

Last week, mortgage rates by region were listed as follows :

• Northeast Region : 3.56% with 0.7 discount points 
• West Region : 3.49% with 0.7 discount points
• Southeast Region : 3.58% with 0.7 discount points
• North Central Region : 3.52% with 0.7 discount points
• Southwest Region : 3.56% with 0.7 discount points

Homeowners and home buyers in California, Oregon and Washington, therefore, received the lowest rates in the country, on average. Owners and buyers in Florida and Georgia, by contrast, received the highest rates.

This week, though, mortgage rates are lower everywhere.

With Spain at risk for a sovereign default and China warning of slow growth, mortgage rates began the week by falling yet again. If you're eligible to refinance, therefore, the timing may be right to lock a mortgage rate. Similarly, if you're an active home buyer , today's low rates will bolster your maximum purchasing power.

Talk to your loan officer about capitalizing on the lowest rates of all-time. Rates may not rise beginning next week, but when they do rise, they'll likely rise quickly.

Revisiting Housing Market Predictions For 2012

When the calendar flips to a new year, analysts and economists like to make predictions for the year ahead.

So, today, with the year half-complete, it's an opportune time to check back to see how the experts' predictions are faring (so far).

If you'll remember, when 2011 closed, the housing market was showing its first signs of a reboot. Home sales were strong, home supplies were nearing bull market levels, and buyer activity was strong.

Homebuilder confidence was at its highest point in 2 years and single-family housing starts had made its biggest one-month gain since 2009. 

In addition, 30-year fixed rate mortgage rates had just broke below the 4 percent barrier and looked poised to stay there.

There was a lot about which to be optimistic in January 2012.

Yet, there were obstacles for the economy. The Eurozone's sovereign debt issues remained in limbo, oil prices were spiking, and the Unemployment Rate remained high -- three credible threats to growth.

At the time, analyst predictions for the economy occupied both ends of the spectrum, and everywhere in between.

Freddie Mac said home prices would rise in 2012, for example, whereas analysts at CBS News said they'd fall. Both made good arguments.

As another example, American Banker said mortgage rates would rise in 2012. The LA Times, however, said just the opposite. And, the problem with these predictions is that each party can make such a sound defense of their respective positions that it's easy to forget that a prediction is really just an opinion.

Nobody can know what the future holds.

A lot has changed since those predictions were made :

• Job growth slowed sharply after a strong Q1 2012 
• Oil costs dropped rapidly beginning in early-May
• Spain and Italy have joined Greece as potential sovereign debt trouble-zones

Now, none of this was known -- or expected -- at the start of the year yet each has made a material change in the direction of both the housing and mortgage markets.

Today, home prices remain low and 30-year fixed rate mortgage rates now average 3.56% nationwide. Home affordability is higher than it's been at any time in recorded history and, at least for now, low downpayment mortgage products remain readily available.

The experts never saw it coming.

6 months from now, the markets may be different. We can't know for sure. All we can know is that today is great time to be a home buyer. Home prices and mortgage rates are favorable.

30-Year Fixed Rate Mortgage Rates Fall To 3.62% Nationwide

30-year fixed rate mortgage rates made new, all-time lows once again this week.

According to Freddie Mac's weekly mortgage rate survey of more than 125 banks nationwide, the average 30-year fixed rate mortgage rate fell 4 basis point to 3.62% nationwide.

The rate is available to conforming, prime borrowers willing to pay an accompanying 0.8 discount points plus a full set of closing costs. A "prime" mortgage applicant typically has excellent credit, verifiable income, and at least 25% equity in their home.

And, it's not just the 30-year fixed rate mortgage that made new lows in this holiday-shortened week, either. The 15-year fixed rate mortgage did, too, falling 5 basis points to 2.89%, on average.

The 15-year fixed rate mortgage requires 0.7 discount points plus closing costs.

Discount points are a one-time, up-front closing cost, based on loan size. If your loan requires 1 discount point, that means that your loan has a closing cost equal to 1 percent of your loan size. If your loan requires two discount points, the fee would be equal to two percent of your loan size; and so on.

So, based on this week's Freddie Mac survey, a home buyer opening a $200,000 mortgage and paying 0.8 discount points would face to a one-time $1,600 fee to be paid at closing.

The good news is that discount points are optional. 

To avoid paying discount points, simply ask your lender for a "zero points" loan. You'll get a higher mortgage rate than what Freddie Mac shows in its survey, but you'll pay fewer closing costs.

Today's low rates are terrific for both home buyers and existing homeowners looking to make a refinance. As compared last year at this time, mortgage rates are down by 98 basis points -- nearly one full percentage point.

Mortgage payments are much lower today as compared to July 2011 : 

• July 2011 : $512.64 principal + interest per $100,000 borrowed
• July 2012 : $455.77 principal + interest per $100,000 borrowed

Today's rates yield an 11 percent payment discount as compared to last year.

Mortgage rates are unpredictable so there's no guarantee that low rates will last forever, much less through the summer. If today's rates meet your household budget, consider locking something in.