Mortgage Rates Continue to Increase
The recent mortgage spike caused quite a stir in the housing market. Rates reached their highest with a full point increase last June, causing a refi crutch and minimal buyer panic as many tried not to get priced out. Recent reports from Freddie Mac, however, revealed that the trend in mortgage rates continue to get higher.
From their report, the 30-year fixed-rate mortgage averaged at 4.51 percent in July 11 from 4.29 last week. This was higher than the 3.56 level from the same month last year. Also experiencing a rise is the 15-year fixed-rate mortgage, which averaged at 3.53 percent, a 0.8 point increase from last week’s 3.39 percent. Compare this with the 2.86 average it had the same time last year.
Many speculate that the high rates are caused by the reduction of bond purchase by the Federal Reserve. Not only does the housing market seeing a steady recovery pace, but the employment sector is also seeing renewed strengths. Increased employment coupled with a rise in hourly wages can only mean an economy on its way to further recovery.
However for many buyers, the recent increase in mortgage rates could mean more monthly payments. Those who were on the fence about buying a new home grabbed the early opportunity to secure their loans when news of an impending rise surfaced. Still for those seeking loans only recently, they might face higher home values. And with lenders probably putting overheads on loan applications, buyers might even pay more than the regular when applying for a mortgage in this climate.