Mortgage Rates in the New Year

Posted by Steph Kaye on Thursday, January 22nd, 2015 at 2:05pm.

Long Term Lows

According to the latest data released Thursday by Freddie Mac, mortgage rates are still great going into the new year. Financial markets are concerned about the global economy, investors are putting money in bonds, which is driving yields down to very low levels. Since mortgage rates are closely attached to yields on long-term government bonds, rates are also down.

The 30-year fixed-rate average lowered to 3.63% with an average 0.7 point. (Points are fees that are paid to a lender equal to 1% of the loan amount.) The 30-year fixed rate has decreased three weeks in a row and is at its lowest level since May 2013. It was 3.66% a week ago and 4.39% a year ago.

Since Nov. 6 when the 30-year fixed rate average was above 4%, it has dropped 39 basis points. For anyone buying a $500,000 home,  the difference between buying that home today with a 30-year fixed-rate mortgage compared to a year ago is about $175 per month. The 15-year fixed-rate average dipped to 2.93% with an average 0.6 point, which is the second week in a row it has stayed below 3%. It was 2.98% a week ago and 3.44% a year ago.

The hybrid adjustable rate mortgages were mixed. The five-year ARM average went down to 2.83% with an average 0.4 point. It was 2.9% a week ago and 3.15% a year ago. The one-year ARM average was consistent at 2.37% with an average 0.4 point. “Mortgage rates continued to fall, albeit at a slower pace,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Housing starts picked up in December coming in at a seasonally adjusted 1.089 million unit pace and beating market expectations. Meanwhile, the drop in energy prices pushed the Producer Price Index down 0.3 percent for December and the Consumer Price Index fell 0.4 percent.”

As rates continued to go down, mortgage applications increased by a lot last week, according to the latest data from the Mortgage Bankers Association. The market composite index, (a measure of total loan application volume), increased 14.2%. The refinance index grew 22%, and the purchase index went down 3%. Government refinances led to the refinance increase, by a 57% increase in FHA loan applications.

If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you. 

Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Lang Premier Properties. See what past clients have to say about Stephanie Lang.  Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.

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