Mortgage interest rates fell once again last week, according to Freddie Mac's weekly mortgage rate survey. The 30-year mortgage rate now averages 3.92% nationwide.
This is the lowest that mortgage rates have been since early-June 2013. Rates are well below their high point of 2014.
The drop in rates has been great news for HARP mortgage applicants and households with an existing FHA or VA home loan. Falling rates have meant lower loan costs and additional opportunities to refinance. Millions of U.S. homeowners are currently "in the money".
Low rates have been a boon for today's active buyers, too. As mortgage rates have dropped, the purchasing power of today's renters and would-be homeowners has increased.
For buyers with a twenty percent downpayment, maximum home purchase prices have increase more than ten percent since January 1. For buyers using low- and no downpayment loans, the
Freddie Mac reported 30-year fixed rate mortgage rates dropping 0.05 percentage points to 3.92% last week nationwide. The rate was available to borrowers willing to pay 0.5 discount points at closing, plus normal closing costs.
Discount points are optional, one-time closing costs. 1 discount point comes at a cost equal to one percent of your loan size such that 0.5 discount points costs $500 per $100,000 borrowed.
30-year mortgage rates have dropped through five consecutive weeks and this week's 3.92% rate is the lowest published 30-year rate since June 2013.
15-year mortgage rates are making new lows, too.
The 15-year fixed-rate mortgage rate averaged 3.08 percent last week. The loan, which has been a popular refinance option this year, has shed close to one-half percentage point since January.
FHA mortgage rates and VA mortgage rates are also quite low. FHA mortgage rates are lower than conventional rates by approximately 25 basis points (0.25%); and VA mortgage rates are lower by about three-eighths (0.375%).
For borrowers paying points, 30-year VA rates may be available in the 2s.
Since the start of the year, mortgage rates have moved steadily and slowly downward. 30-year mortgage rates averaged 4.53% on January 1. Today, they average 3.92 percent.
Interest rates are dropping and it's an excellent time to loan-shop. At least, for now. By the end of the week, the mortgage market landscape may look considerably different.
If you're shopping for a mortgage rate and a low APR, consider acting quickly.
Wednesday, at 2:00 PM ET, the Federal Open Market Committee (FOMC) will adjourn from its seventh scheduled meeting of the year -- a two-day, closed-door affair which begins Tuesday morning.
Wall Street expects the Federal Reserve to stay "on-course".
The group will likely vote to keep the Fed Funds Rate within its current target range near zero percent, where it's been since December 2008; and it is expected to announce another "taper" to it third round of quantitative easing (QE3) which will end the Fed's MBS purchasing.
In theory, the end of QE3 for mortgage results in higher mortgage rates. However, since the QE3 taper began, mortgage rates have been dropping; the result of safe-haven buying and a smaller pool of available mortgage bonds.
Investors are buying U.S. bonds at a faster pace than the Fed can exit the market. The end of QE3 is not resulting in a rise in mortgage rates. The exact opposite is happening, instead.
Incidentally, a similar pattern emerged when the original QE ended in 2009, and when QE2 ended two years later. Mortgage rates lowered at those times despite widespread analyst calls for an increase.
Mortgage rates are lower by more than 0.50 percentage points since the QE3 taper started.
Mortgage rates will have ample opportunity to move this week -- up or down. The economic calendar is stacked, and it includes a meeting of the Federal Open Market Committee.
Any time the Fed meets, mortgage rates can bounce.
The complete weekly calendar is as follows :
Rate shoppers should be attuned to Wednesday's FOMC meeting and the post-meeting press release which the Federal Reserve will issue.
In general, comments which suggest that the U.S. economy is slowing, or that inflation rates are expected to remain low, may result in mortgage rates moving lower. By contrast, comments indicated a strong U.S. economy and high rates of inflation would lead mortgage rates up.
It's been a good few weeks for mortgage rates. Pricing has improved from the start of the year and may continue to drop into 2015. Or, after the Fed meeting, we may discover that the Fed is intent on guiding rates higher.
Get the current mortgage rates live. Rate quotes are available online with no cost, with no obligation, and with no social security number required to get started.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2015 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)