Mortgage Rates Archives – Page 37 of 135 – Fred Gruber

29

Aug

Mortgage Rates

What You Need to Know About Mortgage Rates This Week – August 28, 2023

Understanding the dynamics of mortgage rates is crucial in assessing the affordability of a home. These rates aren’t isolated figures; they pivot on a variety of economic and market stimuli, and they can exhibit volatility from one week to another. Let’s delve into the current scenario of mortgage rates and what it signifies for potential and existing homeowners:

Current data indicates that while mortgage rates are elevated, there’s potential for stabilization or a dip later this year if inflation undergoes moderation.¹.
As of August 25, a 30-year fixed mortgage stood at 7.57%. This is a marginal reduction from the prior week, yet it hovers close to a 22-year peak.² ³.
To regulate inflation, the Federal Reserve heightened its primary interest rate by 0.25% in July. A similar action might be on the horizon for September.⁴.
The median value of an existing house in July escalated to $410,200, marking it as the second most elevated record ever. This price indicates an 8.5% increase from the last quarter.
In July, sales of existing homes dipped by 3.3%. This slump was ubiquitous across all major U.S regions when juxtaposed with sales data from the previous year.¹.
The present housing market exudes an aura of competition and tightness, courtesy of the high demand and insufficient supply dynamics.

Decoding the Mortgage Situation: Questions Homeowners Should Ask
How these trends impact you is contingent on your specific objectives and situation. Consider the following:

Duration of Stay: Are you eyeing your home as a prolonged investment? Locking in a fixed-rate mortgage might be judicious as dramatic rate reductions seem improbable soon. Conversely, those seeking short-term flexibility might find adjustable-rate mortgages appealing, though one should brace for potential hikes in rates.
Monthly Payment Affordability: Elevated mortgage rates translate to steeper monthly outflows. It’s essential to reevaluate your financial strategy or explore homes that don’t strain your finances.
Equity Positioning: When considering refinancing, substantial equity can pave the way for qualifying at a competitive rate and trimming closing expenses. This equity can also be leveraged for cash withdrawals to serve diverse needs, including home enhancements or consolidating debt.
Credit Metrics: Your credit rating and the ratio of your debt to income are pivotal in securing a mortgage at an attractive rate. Superior credit scores and minimized debt ratios amplify the prospects of a beneficial contract. Regularly monitor your credit score, and if required, embark on enhancement strategies.

In Conclusion

Despite the current elevated mortgage rates in comparison to past norms, this scenario may not be perpetual. For those contemplating buying or refinancing, acting promptly might be judicious before any further rate surge. However, it’s paramount to undertake thorough research and solicit multiple lender proposals to secure a mortgage tailored to your fiscal requirements and goals.

Sources:

¹: Current Mortgage Rates: August 28, 2023 | Rates Stabilize

²: Current Mortgage Rates for Aug. 25, 2023: An Important Rate Eases

⁴: Mortgage Rate Forecast August 2023 | Bankrate

³: Mortgage Rates Surge to a 22-Year High, but We See a ‘Glimmer of Optimism’ Ahead

: Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? – Forbes

14

Aug

By First Rate Financial Group

Financial Reports

What’s Ahead For Mortgage Rates This Week – August 14, 2023

What's Ahead For Mortgage Rates This Week - August 14, 2023 Last week’s economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Holds Steady in July

Month-to-month inflation rose at a pace of 0.20 percent in July and met analysts’ expectations. There was no change in the pace of month-to-month inflation from June’s reading of 0.20 percent growth. The Consumer Price Index also reported that year-over-year inflation reached 9.10 percent, which was the highest reading since reaching a 40-year high in mid-2022.

Core inflation, which excludes volatile food and fuel prices, was unchanged from June’s month-to-month pace of 0.20 percent growth. July’s month-to-month reading matched analysts’ expectations. Year-over-year core inflation dipped slightly to 4.70 percent in July as compared to June’s reading of 4.80 percent year-over-year inflation.

Federal Reserve leaders said that they would continue monitoring domestic and global economic developments along with financial and economic data before determining whether or not to raise the Fed’s key interest rate range.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates for the third consecutive week. The average rate for a 30-year fixed-rate mortgage approached seven percent and rose by six basis points to 6.96 percent. Rates for 15-year fixed-rate mortgages rose by nine basis points to 6.34 percent.

248,000 initial jobless claims were filed last week, which surpassed expectations of 231,000 new claims filed and the previous week’s reading of 227,000 first-tine jobless claims filed.

University of Michigan Consumer Sentiment Survey

In other news, the University of Michigan released its monthly preliminary reading on U.S. consumer sentiment.

Consumer sentiment rose to an index reading of 72.0 in August as compared to the July reading of 71.6. The majority of.consumers surveyed indicated that the economy improved in the three months leading up to the survey., Component readings included consumer sentiment index readings for current economic conditions and economic conditions within the next six months. The survey reading for consumer sentiment about economic conditions over the next six months fell to an index reading of 67.3 from the July reading of 68.3 Readings over 50 indicate that most consumers are confident about current economic conditions.

Joanne Hsu, the University of Michigan’s director of consumer surveys, said: “…In general, consumers perceived few differences in the economic environment from last month, but they saw substantial improvement relative to just three months ago.”

What’s Ahead

This week’s scheduled economic reporting includes reading on housing starts and building permits issued, the minutes of the Federal Reserve’s recent meeting of its Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims.

08

Aug

By First Rate Financial Group

Mortgage Rates

Understanding the Distinction Between Mortgage Interest Rates and APR

Understanding the Distinction Between Mortgage Interest Rates and APR When it comes to securing a mortgage, borrowers are often confronted with various terms and figures that may seem confusing at first glance. Two key components that play a significant role in determining the cost of a mortgage are the interest rate and the APR (Annual Percentage Rate). Though they are related, it is crucial to understand the difference between them to make informed decisions while comparing different loan offers. This article aims to shed light on the dissimilarities between the mortgage interest rate and the APR, helping borrowers navigate the mortgage landscape more confidently.

Mortgage Interest Rate

The mortgage interest rate is the fundamental percentage charged by the lender to lend money to the borrower. This rate is applied to the loan principal, and it determines the amount of interest that the borrower will pay over the life of the mortgage. For instance, if a borrower takes out a $300,000 mortgage with a 5% interest rate, they will pay $15,000 in interest in the first year (5% of $300,000).

APR (Annual Percentage Rate)

The APR, on the other hand, encompasses a broader perspective of the overall mortgage cost. It is expressed as an annual percentage and includes not just the interest rate but also additional expenses associated with obtaining the loan. These supplementary costs may involve:

Loan Origination Fees: Fees charged by the lender to process the mortgage application.

Points: Optional fees paid upfront to lower the interest rate over the loan’s duration.

Private Mortgage Insurance (PMI): Required insurance for some loans with a down payment below a certain threshold.

Closing Costs: Fees related to the closing of the mortgage, such as appraisal fees, title fees, and attorney fees.

The APR presents borrowers with a more comprehensive understanding of the total cost of the mortgage, making it easier to compare different loan offers from multiple lenders. By considering the APR, borrowers can better assess the overall financial implications of each mortgage option.

The mortgage interest rate and the APR serve distinct purposes when evaluating mortgage loans. The interest rate represents the cost of borrowing the principal amount, while the APR provides a more inclusive view of the total cost of the mortgage, encompassing additional fees and charges. Borrowers must carefully consider both figures to make well-informed decisions that align with their financial goals and circumstances.

Borrowers should take time to compare various offers, paying attention to both the interest rate and the APR. By doing so, they can select the most suitable mortgage option, ensuring a more secure and financially sound future.