On the back of the Federal Reserve's decision to raise interest rates, mortgage rates were slightly higher on Thursday. The average 30-year mortgage rate, at 4.03%, equates to a $480.30 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $9.78.
The average 15-year mortgage rate, at 3.18%, equates to a $699.76 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $5.81.
Mortgage Type |
Interest Rate Today (U.S. average) |
Interest Rate 1 Month Ago (U.S. average) |
---|---|---|
30-year fixed jumbo |
4.52% |
4.41% |
30-year fixed |
4.05% |
3.88% |
15-year fixed |
3.19% |
3.07% |
30-year fixed refi |
4.07% |
3.95% |
15-year fixed refi |
3.21% |
3.14% |
5/1 ARM |
3.39% |
3.27% |
5/1 ARM refi |
3.57% |
3.51% |
Home purchase activity dipped last week
The Mortgage Bankers' Association Mortgage Application Survey for the week ending Dec. 9, which it released Wednesday, showed that the effective average rate on a 30-year fixed-rate conforming loan had increased over the previous week. ("Conforming" loans are for balances of $417,000 or less.) The average contract rate, before points and origination fees, rose from 4.27% to 4.28%, its highest level since October 2014.
The average contract rate on a 15-year fixed-rate mortgage fell to 3.52% from 3.53%. However, the average effective rate (i.e., accounting for points, including origination fees) was unchanged.
Perhaps the post-election run-up in mortgage rates is now starting to bite, as far as potential homebuyers are concerned: The Market Composite Index, which tracks mortgage loan application volume, fell 4.0% on a seasonally adjusted basis; drilling down, the Refinance Index and the Purchase Index dropped 4% and 3%, respectively.
From this Fool's perspective, now is no time to get cold feet if you're considering buying a home (assuming it is within your means, of course), as rates look more likely to trend higher than lower over the medium to long term. (Over the very short-term, it's anyone's guess what they'll do.) As far as the interest rate cycle is concerned, the "turn" is in.