Sep 19

Mortgage Rates Top 6% for First Time Since 2008

Mortgage Rates Top 6% for First Time Since 2008

The interest rate for the 30-year fixed-rate mortgage crossed a major threshold this week, hitting 6.02%—the first time it has broken 6% since 2008, Freddie Mac reported Thursday. Volatile mortgage rates are sending shockwaves through the housing market and unnerving home buyers who are concerned about shrinking affordability. The 30-year loan averaged just 2.86% a year ago.

The increased rates have pushed monthly mortgage payments 60% higher year over year, says Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®. “There is no doubt that these higher rates hurt housing affordability,” Evangelou writes on the association’s blog. Mortgage rates already marked a grim milestone when they hit 5.7%, a rate that puts a median-priced home out of reach for the typical household.

Mortgage rates this week continued to rise alongside higher-than-expected inflation numbers, adds Sam Khater, Freddie Mac’s chief economist. “Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate,” he says. “This indicates that while home price declines will likely continue, they should not be large.”

Further, homeownership may offer a hedge against inflation, Evangelou says. Fixed-rate mortgages are not adjusted to inflation, and home buyers’ monthly payments will remain the same during the loan period. She says that’s important at a time when rents are rising to their highest level in nearly four decades.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 15:

  • 30-year fixed-rate mortgages: averaged 6.02%, with an average 0.8 point, increasing from last week’s 5.89% average. Last year at this time, 30-year rates averaged 2.86%.
  • 15-year fixed-rate mortgages: averaged 5.21%, with an average 0.9 point, rising from last week’s 5.16% average. A year ago, 15-year rates averaged 2.12%.
  • 5-year hybrid adjustable-rate mortgages: averaged 4.93%, with an average 0.2 point, increasing from last week’s 4.64% average. A year ago, 5-year ARMs averaged 2.51%.

Trying a Different Mortgage Option May Offer Savings

As the average for the 30-year fixed-rate mortgage rises, more home buyers are reaching for adjustable-rate mortgages or 15-year fixed-rate mortgages to lock in a lower rate. A new survey from LendingTree shows that 15-year mortgages could save home buyers an average of $214,899 in interest over the lifetime of their loan compared to 30-year mortgages. Homeowners in California, Hawaii, Washington, Massachusetts and New York stand to save the most from 15-year fixed-rate mortgages, the study shows.

“Borrowers should always keep in mind that different loan types exist and that one size doesn’t necessarily fit all,” says Jacob Channel, LendingTree’s senior economist. “For example, while a 15-year fixed mortgage may be the best option for some, it isn’t always the best option for everyone. Borrowers shouldn’t feel discouraged if they can’t afford a mortgage with a shorter repayment term. Ultimately, while factors like how much interest a loan charges or how long it will take to be paid off are important, they aren’t as important as whether or not that loan is affordable to a borrower.”

©National Association of REALTORS®
Reprinted with permission

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.