Mortgage Rates Have Finally Settled Down This Summer, According to Experts.
After the huge increase in mortgage rates at the start of the year, the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, stated that the rates have finally settled in this Summer.
According to the data released by Freddie Mac, the mortgage rate for the 30-year fixed-rate average increased up to 4.53%, with an average of 0.4 points. It was the first increase that happened in three weeks. The previous rate was only around 4.52% a week ago, while the mortgage rates were only 4.03% a year ago. Meanwhile, the 15-year fixed-rate average also increased with an average of 0.4 points at 4.02% from 3.99% and 3.29% rate a year ago. The 5-year adjustable rate increased up to 3.86% compared to 3.28% a year ago.
The enterprise’s Chief Economist, Sam Khater said that the 10-year treasury yield continues to hover in a narrow range due to the impending global trade tensions in the international market. This makes most investors wary of investing in mortgages. This, in turn, had kept the borrowing cost at bay. Khater revealed how this news is a good one especially for those potential buyers looking to purchase a home during the summer season. Furthermore, many experts do not expect that this trend will change anytime soon. According to the survey conducted by Bankrate.com, most experts say the rates will remain stable for the upcoming week. The Arcus Lending CEO, Shashank Shekhar, also said he expects the rates to hold steadily for a few more months.
The Mortgage Trends
Shekhar expects that the mortgage rates will remain the same as the rates three months back despite the weekly fluctuations we experienced and adding to the fact that the average increase points are slightly lesser compared to the first three months of the year. These competing factors should help regulate the mortgage rates from rising.
Aside from that, the June Producer Price Index increased up to 3.4%, reaching its highest level since 2011. Normally, the rise of the price index would have increased the mortgage rates higher. However, the looming trade war balances the equation of the said inflation report.
According to the Mortgage Bankers Association, the applications for mortgages have also increased since last week. The market composite index increased up to 2.5% while the purchase index increased up to 7%. Meanwhile, the refinance index plummeted to 4%. The refinance share of mortgage activity only amounted up to 34.8%, reaching its lowest level since August 2008.
The Mortgage Credits
Stevens added that the refinance volume had dropped to its lowest level last week. This means that the economy is running steadily, along with job growth. It translates into a stronger purchasing market. However, the lack of inventory is still keeping the trend of sales at bay. The MBA recently released MCAI, or also known as Mortgage Credit Availability Index, which showed the credit availability had increased since last month. The MCAI rose with 0.2% at 181 in June. This indicates the lending standards, guidelines, and requirements are loosening.
Meanwhile, MBA’s Chief Economist, Mike Fratantoni, said that the loosening of mortgage credit was offset by the credit decline for government-state loan programs. The Government MCA recently tightened its guidelines for the past few months due to the new policies implemented by the Trump Administration. The Government also plans to reduce the Veterans Administration Interest Rate Reduction Refinance Loan program.
More in Loans & Mortgages
How To Protect Your Small Business From Predatory Lenders
You have just ventured into a new business, and you started searching for the best interest rates online. You come across...September 13, 2018
These Four Tips Will Make Your Already Great Career Even Better
Not everyone is lucky enough to say that they have a great career so far. Most people are either unhappy with...September 9, 2018
Top Seven Things Not to Buy Online
These days, consumers have the convenience of staying at home and surfing the Internet to scout for items to buy, both...September 2, 2018
Three of the Best Kinds of Loans For Small Business Owners!
Running a small business is a lot different from running a big company. First off, small businesses cannot start with a...August 24, 2018
Afraid of A Burnout? Here Are Five Rules To Help Entrepreneurs Keep Moving Forward
Being an entrepreneur can be tough. It is commendable that you have come this far and have chosen the difficult thing...August 22, 2018
Living Beyond Your Means: Six Telltale Signs
Many finance gurus advise against living beyond your means as one of the surefire paths to wealth-building failure. Basically, living beyond...August 20, 2018
Automotive Industry Embroiled in US-China Trade War
Shanghai customs agents have disallowed the releasing of a shipment of American-made Mercedes-Benz SUVs. They claim that they represent a safety...August 16, 2018
How to ‘Re-Program’ Your Brain to Be Patient
Just how patient are you? Each of us has a different tolerance level when it comes to getting what we want....August 15, 2018
Tech Giant Google Courts Major Partners Like Mobvoi Inc For Possible Integration In China
China may have blocked Google’s search engine operations in the country, but inside the heart of Beijing lies an internet giant...August 15, 2018