While you have been enjoying the holiday season, mortgage rates have been climbing
The average rate for a 30-year fixed rate mortgage climbed nearly 40 basis points, from 4.1% to 4.53%, from the beginning of November through the first week in January. Rates are roughly at the same level as in August. Rates are likely to rise through the spring as the Federal Reserve tappers its purchases of mortgage backed securities and Treasuries.
Mortgage applications fell in four of the last six weeks, which experts see as caused by the steady rise in mortgage rates. The National Association of Realtors® expresses concern that higher rates make homes less affordable for an increasing share of the population. I would remind my clients that homes have historically sold when mortgage rates were 8%-16% and we’re quite a ways from that level. Also, home purchases were strong in the fall even though rates were at this level in August when those buyers were making their loan applications.
Some are concerned about the divergence between mortgage applications and the 30-year home loan interest rate. Yes, it’s Econ 101.Consult with local Flagstaff mortgage lenders.
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