Real Estate
Why This October May Be A Scary Time To Buy A House
Mortgage rates crept up again this week, but they're still below this year's peak. But that might not be the case for long. [SPONSORED]
Mortgage rates have gone up for the second week in a row, though they remain far below the highest levels seen this year. After this week's announcement by the Federal Reserve, we also got a bit of insight of what's to come. It turns out that Halloween may not be the only scary thing coming in October for potential home buyers.
This week, the benchmark 30-year fixed mortgage rate is just a hair above the 4 percent mark in Bankrate’s weekly survey. That means homebuyers can still get great mortgage rates compared to earlier this year. The 30-year fixed peaked at 4.44 percent in mid-March.
Homeowners can still find attractive refinance deals, too.
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Rates may not remain low for long
Mortgage rates are likely to stay low in the coming months but could increase after the Federal Reserve said Wednesday that in October, it would begin unwinding its stimulus that helped keep rates low following the Great Recession.
The Fed also decided to keep its key short-term interest rate unchanged, which means rates on credit cards and home equity lines of credit will not change in the near term. The central bank’s decision to hold rates steady indirectly influences mortgages.
Mortgage applications, home-building dip
The latest slight increase in mortgage rates comes at a time when fewer people are applying for mortgages and fewer new homes are under construction.
The volume of mortgage applications fell 9.7 percent last week, compared to the previous week, according to the latest reading from the Mortgage Bankers Association.
Meanwhile, housing starts nationwide declined 0.8 percent from July to August, according to Census data released Tuesday. But housing starts were still up 1.4 percent from a year ago.
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Mortgage rates rise
The benchmark 30-year fixed-rate mortgage rose this week to 4.04 percent from 3.99 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 3.62 percent. Four weeks ago, the rate was 4.02 percent. The 30-year fixed-rate average for this week is 0.40 percentage points below the 52-week high of 4.44 percent, and is 0.50 percentage points greater than the 52-week low of 3.54 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.28 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.09 percent. This week’s rate is 0.05 percentage points lower than the 52-week average.
- The 15-year fixed-rate mortgage rose to 3.25 percent from 3.22 percent.
- The 5/1 adjustable-rate mortgage rose to 3.52 percent from 3.46 percent.
- The 30-year fixed-rate jumbo mortgage rose to 4.09 percent from 4.01 percent.
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