The speed of residential construction has shot up over the past few months and is well in line to reach its best figures in over a decade. For a market that has been short on inventory for some time now, this is great news, especially with the spring season already calling on us.

Mortgage Rates: rates increase all around

This week’s Mortgage Banking Associations’ (MBA) weekly rate survey reveals an increase across the board.

According to the MBA Weekly Survey: “The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77 percent from 3.72 percent, with points remaining unchanged at 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.”

1 point in cost = 1% of the loan amount

“The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.79 percent from 3.75 percent, with points increasing to 0.19 from 0.17
(including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.”

“The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22 percent from 3.20 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.” 

“The average contract interest rate for 5/1 ARMs increased to 3.23 percent from 3.21 percent, with points increasing to 0.21 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.”

Mortgage Rate Activity and Predictions

The Bankrate’s weekly survey of mortgage and economic experts, countrywide, reveals that over the coming week (20th February to 26th February), experts are most inclined towards an unchanged interest rate.

Out of those surveyed, 15% feel rates will move up, 23% sense that rates will come down while 62% of the experts feel rates will remain unchanged (with a maximum movement of two basis points either side).

Freddie Mac’s weekly mortgage survey has reported that the conforming rates for the week- 15th February to 21st February- have shot up by 0.02% for 30-Y FRM as well as 15-Y FRM.

Freddie Mac’s weekly mortgage survey noted, “The low mortgage rate environment continues to spur homebuying activity, with applications to purchase a home up fifteen percent from a year ago. We’ve seen new residential construction surge over the last few months, on pace to reach the highest level in more than a decade. This is a good sign for the inventory-starved housing market and is a promising indication for the spring homebuying season.”

Mortgage Rate Lock Advice

I would recommend you to Lock if you are closing within the next week and Float if you are closing any time beyond it.