November 24th, 2014 8:23 AM by Jackie A. Graves, President
Mortgage rates dropped back below 4%
this week, giving buyers another reason to jump into the market now rather than
“If you are planning to buy a home in the next year, it’s
better to do it sooner rather than later,” said Frank Nothaft, vice president
and chief economist for Freddie Mac, in a video commentary this week.
The 30-year fixed-rate mortgage averaged 3.99%, down from 4.01%
last week, according to the Freddie Mac Primary Mortgage
Market Survey. A 15-year fixed-rate mortgage averaged 3.17%, down
from last week when it averaged 3.2%.
In addition, a five-year adjustable rate mortgage (ARM) averaged 3.01%
this week, down from an average 3.02% last week. Not all rates dropped, though,
as a one-year ARM averaged 2.44% this week, a little bit up from last
week’s average of 2.43%.
“Fixed mortgage rates were slightly down as housing starts declined 2.8%
in October below the upwardly revised September rate,” Nothaft said. “However,
building permits increased 4.8% in October.”
Building permit activity gives an indication that home builders are
confident enough to plan future construction. In fact, builder confidence rose
four points to a level of 58 on the National Association of Home Builders/Wells
Fargo Housing Market Index (HMI), signaling that more new, single-family home
construction is on the horizon.
New construction will drive the housing
market in 2015.
“We expect home sales to rise in 2015 up about 5% compared to 2014, to
the highest level of home sales we’ve seen since 2007,” Nothaft said.
Existing home sales were up 1.5% in October and sales are at their
highest annual pace since September 2013, according to the National Association
of REALTORS®. Additionally, weekly mortgage applications increased nearly 5%,
according to the Mortgage Bankers Association.
In the latest Mortgage Rate Trend Index by
Bankrate.com, most of the analysts polled believed rates would basically hold
steady for a while longer. Among the loan experts who responded, 31% believed
mortgage rates would rise over the next week or so; none thought rates would
fall; and 69% believed rates would remain relatively unchanged (plus or minus
two basis points).
“Treasuries and mortgage-backed bonds have been trading in a tight range
in recent days, leaving mortgage rates essentially unchanged,” said Michael
Becker, branch manager at Sierra Pacific Mortgage in White Marsh, MD. “Unless the minutes from
the latest Fed meeting surprise the markets, I expect that trend to continue.”
By: Chrystal Caruthers | To view the original article click here