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Mortgage Rates Tick Up But Still Low

MortgageMortgage rates for 30-year mortgages are up but still sitting below 4%, the first increase in five weeks. In a statement from Freddie Mac, rates stayed at 4.53% in January but then last week they dropped from 3.98% to 3.92%, the lowest reported since June 2013.

As far as the rate for a 15-year-mortgage, one of the most popular choices, a small increase from 3.08% to 3.13% was reported. Mortgage Bankers Association said that due to the consistently low long-term rates, a significant number of homeowners have looked to refinance.

During week-ending October 17, applications from homeowners wanting to refinance climbed 23% as borrowers looked to secure a better rate, the highest level since one year prior. In comparison, applications to refinance in the week-ended October 24 declined 7%.

Over the past few weeks, growing concerns over weakened global economies has created unrest in the stock market. In response, many investors poured money into US Treasury notes as a safe haven. This higher demand drove prices up for government bonds, which in turn caused yield to drop. On the 10-year Treasury note, yield reached new lows with rates for mortgage loans following.

The 10-year Treasury note increased from 2.22% to 2.32% last Wednesday and on Thursday, traded at 2.29%.

In an effort to determine average mortgage rates, Freddie Mac conducted surveys throughout the United States last Monday through Wednesday. The average excluded points also referred to as extra fees, with one point being equal to 1% of the loan amount. Typically, points are paid by borrowers in order to secure the lowest possible rates.

Regarding the average fee for 15-year and 30-year-mortgages, last weeks’ 0.5 point did not change. For a five-year adjustable rate mortgage, the average increased from 2.91% to 2.94% with a steady fee of 0.5 point. Specific to a one-year adjustable rate mortgage, average rate rose slightly from 2.41% to 2.43% while the fee at 0.4 point remained the same.

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