Increasing Mortgage Rates

Increasing Mortgage Rates And Impact On Home Values

Gustan Cho Associates are mortgage brokers licensed in 48 states

This BLOG On Increasing Mortgage Rates Was UPDATED On December 30th, 2019

Which means increasing mortgage rates and affecting the value of your home

Increasing Mortgage Rates are not affecting home buyers from purchasing homes.

  • Despite increasing mortgage rates, there is a shortage of housing inventory and homes are selling quicker than ever.
  • Lack of housing inventory, despite increasing mortgage rates, are pushing home prices higher throughout the country, especially in most parts of Colorado, Kentucky, Mississippi, New Jersey, Pennsylvania, Ohio, California, Southern Florida, the Chicagoland Area, the Houston and Dallas area, the Atlanta Georgia region
  • Indianapolis and its surrounding areas, and most parts of Michigan
  • Increasing mortgage rates and the combination of higher rents throughout the country is forcing many first time home buyers to become homeowners
  • There are record amounts of pre-approval requests to mortgage lenders nationwide

With the lax HUD Guidelines and the low down payment requirements on both FHA and Conventional Loans, many first time home buyers are not waiting any longer to pull the trigger in buying their first home.

Mortgage Rates On All Loan Programs

Every mortgage loan program’s mortgage rates have gone up substantially.

  • From FHA, VA, Conventional to Jumbo mortgage loans as well as portfolio and commercial mortgage rates
  • Back on 2nd May 2017, the average 30 years fixed mortgage rate was at 3.75%
  • Just last week, the average 30 years fixed mortgage rate climbed to 4.875%

During the same time frame, 15 year fixed mortgage rates broke the 3.0% mark and went from 3.125% to 3.875%.

Why Sudden Increase In Mortgage Rates?

Why Sudden Increase In Mortgage Rates?

Mortgage rates are affected by how mortgage-backed securities, also known as MBS, are publicly traded on Wall Street.

  • Mortgage rates go down when mortgage-backed securities go up
  • Mortgage rates go up when mortgage-backed securities go down
  • Mortgages are bundled up together and that is how mortgage-backed securities are sold as a security instrument

Mortgage-backed securities normally decline in value when the market gets positive economic news.

What Next On Mortgage Rates?

Will mortgage rates fall back to the low 3.0% range?

  • Nobody has a crystal ball and from what has transpired by the past several weeks
  • It seems that the new benchmark for mortgage rates will be in the 4.0% range
  • Market experts are thinking that short term mortgage rates will stabilize in the mid 4.0% to 5.25% range
  • If you are thinking of getting a mortgage soon, my thoughts are not to speculate and lock your rates as soon as possible

Many have speculated and not locked their rates and are now paying the price

2019 Update On Mortgage Rates

The importance of the 2019 update on mortgage rates

A lot of changes happened with mortgage rates from the time this mortgage blog article was written and published.

  • Mortgage rates on both conventional loans and FHA loans have not returned to the levels of 2013  
  • FHA mortgage rates in May 2013 was 3.25%
  • Today FHA mortgage rates are around 4.0%
  • Conventional Mortgage Rates in May 2013 was around 3.5%
  • Today conventional mortgage rates are around 4.25%

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