Mortgage Rates Rise As Pending-Home Sales Decline in November

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The main fixed-rate mortgage rates moved higher on Wednesday. The average 30-year mortgage rate is up 2 basis points, at 4.18%, which equates to a $487.85 monthly payment per $100,000 borrowed. (One basis point equals one hundredth of a percentage point.) A month ago, the equivalent payment would have been lower by $9.28.

The average 15-year mortgage is three basis points higher, at 3.35%, equating to a $707.54 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $9.24.

Both rates are their highest levels since early 2014.

5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED 5-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.

There has been little evidence to support the notion that the post-election spike in mortgage rates has diminished homebuyers' appetites. However, you can put today's release from the National Association of Realtors in that category, as pending home sales in November fell to their lowest level in close to a year. Of the four regions (Midwest, Northeast, South, West), only the Northeast produced monthly and year-on-year increases in pending sales last month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 2.5% to 107.3 in November. The decline puts the index 0.4% below its level of 12 months ago and at its lowest level since January, when it was at 105.4. In fact, as the following graph illustrates, one can follow the November reading as far back as early 2015. (See the red line.)

Nevertheless, the trend over the prior three years (the green line) is positive.

As new data for December comes in, the impact of rising mortgage rates will become clearer. Still, for potential homebuyers, it's worth taking the long-term view -- even following the post-election run-up, mortgage rates remain extremely affordable by historical standards.