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Mortgage Rates Inch Up Again, Still Lower Than a Year Ago
|After hitting new record lows for weeks in a row, fixed mortgage rates have been moving up, indicating an improving housing market. While combined reports of higher home prices and mortgage rates may be a turnoff to prospective buyers, when comparing rates from last year, becoming a homeowner is still highly affordable.
Friday, August 24th, 2012
After hitting new record lows for weeks in a row, fixed mortgage rates have been moving up, indicating an improving housing market. While combined reports of higher home prices and mortgage rates may be a turnoff to prospective buyers, when comparing rates from last year, becoming a homeowner is still highly affordable.
Freddie Mac's Primary Mortgage Market Survey for the week ending August 16 reveals the average rate for 30-year fixed-rate mortgages was 3.62 percent, up from the previous week when it averaged 3.59 percent. This marks the third week of higher mortgage rates, following a long streak of reaching new record lows.
While low mortgage rates do make purchasing a home more affordable, higher averages are an indication of a stronger housing market, which is good for both buyers and sellers. Despite the weekly gain, the average rate for 30-year FRMs is still considerably lower than this time last year, when the average was 4.15 percent.
Additionally, the average rate for 15-year FRMS was up from the last week, moving up to 2.88 percent from 2.84 percent. A year ago, the average was 3.36 percent, meaning this option is still more affordable than in recent years even though rates are on the rise.
Despite increased rates for fixed-rate mortgages, Freddie Mac reports the average rate for 5-year adjustable-rate mortgages was 2.76 percent, down slightly from the week before when it averaged 2.77 percent. This time last year the average was 3.08 percent.
Industry experts have been suggesting that both rates and home prices will continue to increase before 2013 as the economy continues to stabilize.
"The latest economic indicators point toward low inflation but gradually stronger economic activity which placed further upward pressure on long-term Treasury yields and, in turn, fixed mortgage rates," said Frank Nothaft, vice president and chief economist for Freddie Mac. "For example, inflation remains in check with 12-month growth in the core consumer price index falling for a second month to 2.1 percent in July."
Prospective buyers are urged to begin their home search while rates and prices remain relatively low.
National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.