Brexit caused a celebration for the US housing market, bringing down mortgage interest rates to near historic lows and making homeownership available to American homebuyers more than ever. However, another market reaction spurred a surge in rates. After the phenomenal Brexit last July, the results of the US elections pushed rates up and has since went on a steady climb without any sign of descent.
But Freddie Mac’s latest survey results showed that contrary to the anticipated, mortgage rates, in fact, dropped. In a report released on the fifth of January, 2017welcomed the first time in three years that the year opened with the rate above 4 percent.
The Report
- 30-year fixed rate mortgage decreased by 12 basis points to 4.20 percent this week. In 2016, during the same period, the 30-year FRM average was at 3.97 percent
- 15-year fixed rate mortgage also fell from 3.55 percent last weekto 3.44 percent this week. At the same time a year ago, 15-year FRM average was at 3.26 percent
- 5-year treasury-indexed hybrid adjustable rate mortgage, on the other hand, increased to 3.33 percent compared to last week’s 3.30 percent. On the previous year, 5-year ARM average was at 3.09 percent
The Survey
The Primary Mortgage Market Survey®was established in April 1971 as the foremost source of mortgage trends in the regional and national level. Its data is utilized by both the public and the mortgage industry at large to gauge market conditions and evaluate mortgage loan options.
Survey Parameters
The survey results are gathered based on lenders’ most popular mortgage products – inclusive of 30 and 15-year FRMs as well as adjustable-rate mortgages. The first-lien prime conventional conforming home purchase mortgages (with an LTV of 80 percent) are considered primary basis for the survey. Meanwhile, the U.S. Treasury yields are used to index ARMs. Lenders are asked to provide the a) initial coupon rate and points, as well as b) ARM margins for this purpose.
Locking in now could be great for mortgage shoppers although you need not worry if you can’t. Rates on a 4-percent range are considered by experts to be good, compared to other moments in housing history. Do not feel pressured by rates dropping. You need to balance out the need with the existing opportunity. After all, it’s all about the need. Do not make a move if there’s not a need to.
