U.S. Mortgage Rates Rise Modestly as Housing Market Trends Evolve

U.S. mortgage rates have risen modestly, but what does this mean for homebuyers and sellers? Mortgage rates have increased, with the 30-year fixed-rate mortgage rising to 3.8%, up from 3.7% in the previous week.

The housing market is evolving, with changes in mortgage rates influencing buyer behavior. Home prices are still rising, but at a slower pace than in previous years.

Buyers are taking notice of the increased mortgage rates, with some opting to act quickly to secure a lower rate. Sellers, on the other hand, are adjusting their expectations for home prices.

Mortgage rates have been trending upward, but the latest numbers from the Mortgage Bankers Association show a modest increase. For the week ending September 17, the average interest rates for 30-year fixed mortgages remained unchanged at 3.03% for conforming loan balances.

Points, however, decreased from 0.32 to 0.30 for 80% LTV loans. This is good news for homebuyers and refinancers, as lower points can save them money in the long run.

FHA-backed 30-year fixed mortgage rates rose from 3.04% to 3.07%, while points fell from 0.27 to 0.25 for 80% LTV loans. Jumbo loan balances saw a slight decrease in rates, from 3.13% to 3.11%, but points increased from 0.21 to 0.25 for 80% LTV loans.

Here are the key takeaways on mortgage rates for the week ending September 17:

Overall, the market is showing signs of life, with mortgage applications increasing by 4.9% in the week ending September 17. This is a welcome boost after a slow summer.

30-year fixed rates have increased by 2 basis points to 2.88%, a slight rise from this time last year when rates stood at 2.90%.

The average fee for 30-year fixed rates remains unchanged at 0.7 points, which is a significant factor to consider when deciding on a mortgage.

In contrast, 15-year fixed rates rose by 3 basis points to 2.15%, but are still down by 25 basis points from 2.40% a year ago.

Here's a quick summary of the current rates:

Mortgage applications have seen a slight increase in recent weeks, with both refi and purchase applications edging up.

This uptick is particularly notable for purchase applications, which are nearing levels from a year ago.

The benefits of lower rates are being offset by affordability challenges, which might still be hindering purchase decisions.

Buyers could be seeing some relief in terms of home prices, with the pace of growth slowing over the summer.

Price growth was still up 4.3% year-over-year, but CoreLogic forecasts that the pace will slow by nearly half in the coming year.

National home prices aren't likely to fall, but the slowdown in growth is a welcome trend for potential buyers.

Freddie Mac rates have been making headlines lately, and for good reason. The weekly average rates for new mortgages as of 23 September were quoted by Freddie Mac to be 2.88% for a 30-year fixed rate.

This is a slight increase from last week, but still a great opportunity for homebuyers. In fact, rates had stood at 2.90% this time last year, so we're essentially back to where we started.

The 15-year fixed rate also saw an increase, rising to 2.15% in the week. This is a 3 basis point increase, but rates were down by 25 basis points from 2.40% a year ago.

If you're looking to refinance your mortgage, the 5-year fixed rate might be worth considering. It decreased by 8 basis points to 2.43% in the week, and rates were down by 47 points from 2.90% a year ago.

Here's a quick summary of the Freddie Mac rates:

The slowdown in economic growth around the world has caused a flight to the quality of U.S financial markets, leading to a rise in foreign investor purchases of U.S Treasuries. This has caused mortgage rates to remain in place, despite increasing dispersion of inflation across different consumer goods and services.

Building permits jumped by 6% in August, a significant increase after a 6.2% decline in housing starts the previous month.

New housing starts rose by 3.9%, which helped ease inventory shortages.

Existing home sales declined by 2.0% in August, reversing a 2.2% increase from July.

The FED left monetary policy unchanged on Wednesday, and held back on committing a date to begin tapering.

Interest rate projections and the FOMC dot plot chart revealed a divided Committee, with some supporting rate hikes next year.

The housing sector data had a muted impact on yields and mortgage rates, but the FED's decision kept the focus on monetary policy.

The Mortgage Bankers Association reported a 4.9% increase in the Market Composite Index, which measures mortgage loan application volume, in the week ending 17 September.

This uptick in activity is a welcome sign, especially after a slight decline in the previous week. The Refinance Index also increased by 7%, although it remains 5% lower than the same week one year ago.

The refinance share of mortgage activity rose from 64.9% to 66.2% in the week ending 17 September, indicating a shift towards refinancing over purchasing. This shift is likely due to the current state of the market, with fast-rising home prices and low inventory.

A resurgence in mortgage applications was observed after Labor Day, with overall activity reaching its highest level in over a month. This trend suggests that housing demand remains strong heading into the fall.

Here are some key statistics from the Mortgage Bankers Association: