Mortgage-Interest Rates Hit Highest Level In Over a Year

Mortgage interest rates were at 3.667% for a 30-year fixed-rate loan as of this past Thursday, January 13, 2022.  As the chart below illustrates, after dipping slightly the week prior, the rates this most recent week hit the highest level in over a year.

Mortgage rates for an FHA mortgage also hit the highest level in over a year too with rates hitting 3.743%.

Mortgage Interest Rates – 30 Years Conforming Conventional Loan -Past 12 Months

(click on chart for live, interactive chart and other loan types)

Mortgage Interest Rates - 30 Years Conforming Conventional Loan -Past 12 Months

Mortgage Interest Rates – 30 Year FHA

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Mortgage Interest Rates - 30 Year FHA

 

Mortgage Interest Rates Hit Highest Level In Six Months

Mortgage interest rates were at 2.65% for a 30-year fixed-rate loan at the beginning of this year, according to Freddie Mac’s Primary Mortgage Market Survey® and rose through the late winter months and started the spring housing season with rates hitting 3.18% on April 1st.  This rate was the highest rate since June, 2020 when rates hit 3.21% and was the highest level for interest rates in 2021.  This past week, according to the same market survey, the 30 -year fixed-rate mortgage interest rate hit 3.09%, the highest level in six-months, but still below the peak rate for the year of 3.18%.

As the chart below illustrates,  mortgage interest rates for a 30-year fixed-rate mortgage have spent most of the time this year between about 2.75% and 3.0%. This is a pretty narrow fluctuation range and, even at the high of the range, or at the peak rate of 3.18% for this year, is still historically very attractive as evidence by the second chart below, one that shows mortgage interest rates for the past 10-years.

Mortgage Interest Rates – 30 Years Conforming Conventional Loan -Past 12 Months

(click on chart for live, interactive chart and other loan types)Mortgage Interest Rates - 30 Years Conforming Conventional Loan -Past 12 Months

Mortgage Interest Rates – 30 Years Conforming Conventional Loan -Past 10 Years

(click on chart for live, interactive chart and other loan types)

Mortgage Interest Rates - 30 Years Conforming Conventional Loan -Past 10 Years

 

Strong Economy and Low Inflation Prompt Fed Reserve To Lower Interest Rates

Yesterday afternoon, the Federal Reserve released a statement that was quite a vote of confidence for how the economy is doing.  The Fed Reserve’s statement included “…the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.” and went on to say “Market-based measures of inflation compensation remain low;”.

As a result of the positive economic conditions, the Federal Open Market Committee announced it would lower the target range for the federal funds rate to 2 to 2-1/4 percent.  The committee went on to give a very positive outlook on the future economy as well saying that “sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes…”.

Will the move by the Fed Reserve cause lower mortgage interest rates?

It’s hard to say if this announcement will prompt immediate lower interest rates as the mortgage market takes a little longer view of things.  However, while we don’t know if mortgage rates will decline or, if so by how much, I think, absent some major shift or change in the economy,  it is safe to say that mortgage rates are not going up at this time or in the very near future.

Mortgage interest rates have been at historic lows for years…

Continue reading “Strong Economy and Low Inflation Prompt Fed Reserve To Lower Interest Rates

Mortgage Interest Rates Drop to Lowest Rate In Over a Year

After mortgage interest rates on a 30-year fixed rate mortgage nearly hit 5 percent back in November, they have steadily declined and this past week fell to an average of 4.37% according to the Freddie Mac Primary Mortgage Market Survey.  Last weeks 30-year fixed rate mortgage rate of 4.37% was the lowest average rate report by the survey since Feb 8, 2018, when the average rates were 4.32%.

The outlook for mortgage interest rates looks promising as well with the most recent Fannie Mae Housing Forecast predicting the 30-year fixed rate will stay at 4.5% through the end of 2020.

30-Year Fixed Rate Mortgage Average In The U.S.

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30-Year Fixed Rate Mortgage Average In The U.S.

Home Loan Origination Data Showing Impact Of Interest Rates On Refi’s But Not Home Purchases In St Louis

Mortgage interest rates have been on the rise and hit their highest level in seven years toward the end of May, however, the higher rates don’t appear to be having an effect on the number of people in St Louis obtaining home loans yet.  The table below is based upon the latest data from ATTOM Data Research, just released yesterday, and shows that there were 6,830 home purchase mortgage loans obtained in the St Louis metro area during the 1st quarter of this year.  This represents an increase of nearly 10% from the number of home purchase mortgage loans that were obtained in St Louis a year ago.  Even if we go back to the first quarter of 2016, when the average 30-year fixed rate mortgage rate was below 4%, there were just 6,093 home purchase loan originations, 12.1% fewer than the most recent quarter.

The number of St Louis homeowners refinancing their home mortgages during the first quarter of this year dropped over 10% from a year ago and was down over 15% from the first quarter of 2016.

Continue reading “Home Loan Origination Data Showing Impact Of Interest Rates On Refi’s But Not Home Purchases In St Louis

Mortgage Interest Rates Hit Highest Level In Over Seven Years

Freddie Mac has been tracking average mortgage rates since 1971 through their Primary Mortgage Market Survey® and yesterday it revealed that, as the chart below shows, the average interest rate on a 30-year fixed-rate mortgage was at 4.6%, the highest rate in over 7 years.  The last time mortgage interest rates were this high was back on May 5, 2011 when the 30-year rate hit 4.71%.

Even with the recent increase, mortgage interest rates are still reasonably low from a historical perspective.  As the second chart below illustrates, 20 years ago the rates were around 8 percent.  Mortgage interest rates then spent nearly a decade around the 5% – 6% range before beginning the descent after the housing bubble burst in 2008.

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Mortgage Interest Rates – 2018- Chart

Mortgage Interest Rates - 2018- Chart 

Mortgage Interest Rates – 1995 -2018- Chart

Mortgage Interest Rates - 2017- Chart 

 

Housing Boom Era Home Buying Strategies Returning

st louis mortgage refinance

Tyler Frank,
Paramount Mortgage
NMLS ID 942420

Housing Boom Era Type Home Buying Tactics Reappearing in St Louis Real Estate Market

During the home buying frenzy of the housing boom, which peaked in 2006, it was common to see home buyers, in an effort to beat out other buyers fighting for the same home, include price escalation clauses in their offers and make “naked” (contingency-free) offers.  It was also common for a seller to purposely price their home low in an effort to rein in multiple buyers and pit them against each other in a bidding war.  We are now seeing this all again as buyers compete to buy homes from an inventory of homes for sale that has shank dramatically in the past year.

Continue reading “Housing Boom Era Home Buying Strategies Returning