Mortgage Rates Keep Climbing but Are Still a Bargain
Mortgage rates have moved higher for the fourth week in a row, but don't get the wrong idea. Rates are still pretty darn low, both historically speaking and compared to where they were just months ago.
So if you've been fantasizing about buying a place and saying goodbye to renting (or to Mom and Dad's basement), you can find an excellent mortgage rate.
This week's numbers
The average rate on 30-year fixed-rate mortgages has risen to 4.20%, from last week's 4.17%, reports mortgage giant Freddie Mac.
But keep in mind that last year at this time, the benchmark mortgage rate was much higher: averaging 4.58%. The loans in Freddie Mac's survey come with an average 0.5 point.
With rates continuing to go up, mortgage applications fell 7.3% last week, led by an 11% drop in refinancings, the Mortgage Bankers Association says.
Applications for loans for home purchases dipped 4%, one week after reaching the highest level since April 2010.
Why rates are doing what they're doing
The homebuying season is likely to be a strong one.
The government reported this week that March was the best month for sales of new single-family homes since November 2017. Low mortgage rates played a role in that, says Sam Khater, Freddie Mac’s chief economist.
“Despite the recent rise in mortgage rates, both existing and new home sales continue to show strength — indicating the lagged effect of lower rates on housing demand," he says.
The spring homebuying season is now underway, and Khater predicts it will be a big one.
Interest rates remain much more attractive than they were last fall, when 30-year mortgages peaked at nearly 5%.
They're not expected to return to those levels anytime soon, though Freddie Mac is expecting 30-year rates to average 4.5% throughout 2019. That's slightly below last year's average.
Are you in the market to buy a house? Check out today's best mortgage rates.
This week's other mortgage rates
Rates on 15-year mortgages have gone up to an average 3.64%, from last week's 3.62%, Freddie Mac says. One year ago, rates on those shorter-term home loans were averaging 4.02%.
Meanwhile, 5/1 adjustable-rate mortgages — with rates that hold steady for five years and then can "adjust" up (or down) each year — have ticked down. They're being offered this week at initial rates averaging 3.77%, compared to last week's average of 3.78%.
At this time last year, those ARMs were being offered at an average initial rate of 3.74%.
When the time comes to apply for a mortgage, you'll want to some down payment money ready. Find a savings account at a great rate to help you pull that cash together.
