Having jumped 16 basis points (0.16 percentage points) last week, the average rate for a benchmark 30-year mortgage has since inched up another 5 basis points to 3.02 percent, which is the highest average rate in a little over seven months.
That being said, the average 30-year rate is still 27 basis points below its mark at the same time last year, only 37 basis points above its all-time low of 2.65 percent in January, and roughly half the average 30-year rate over the past 30 years. And yet, mortgage loan application volumes have slowed.
At the same time, the average rate for a 15-year fixed mortgage held at 2.34 percent over the past week, which is 45 basis points below its mark at the same time last year, and the average rate for a 5-year adjustable dropped 26 basis points to 2.73 percent, which is 45 basis points below its mark at the same time last year as well.
Comments from Plugged-In Readers
The trend is they are going lower every 5 years and I don’t think I will see them anywhere near 4% in the next decade or two. Low interest rates are here to stay for my lifetime.
I think you’re right. Higher mortgage rates would crush the housing market. Roughly speaking, each 1% increase to mortgage rates decreases home prices by 10%.
Anyone can test this out on a mortgage calculator (keep the monthly payment the same, raise the rate, then see what happens to the loan amount).
Disagree on that statement 100%.
that is textbook academia math IMO. bonds drop -10%, yields rise +11%. Technically true but there are WAY too many other qualitative factors that move around that math equation, which technically holds.
So I 100% disagree if rates move up 1% home prices drop 10%.Equating the relationship between bond yields and home prices is not accurate IMO, but if you have data to support that it does hold true I would love to see it.
“real estate is local”
True now, true forever.
Disclaimer: (my) opinions are like @holes…you know the rest of that quote, and also, just an armchair architect long time Socketsite follower.
Fun times we are living in!
Teleconferencing and Networking have entered the chat.
We are witnessing a historical & global re-configuration of the way humans live.
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