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30-Year Mortgage Rates Exert Slight Ascendancy from Recent 6-Week Minima

Mortgage rates for 30-year loans experienced a minor increase after four days of decline, as reported on Friday. Additionally, rates for various other new loan purchase types also experienced a hike.

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Mortgage rates for a 30-year loan term inched upward on Friday, halting a four-day decline, with...
Mortgage rates for a 30-year loan term inched upward on Friday, halting a four-day decline, with increases also observed for various other new purchase loan categories.

30-Year Mortgage Rates Exert Slight Ascendancy from Recent 6-Week Minima

Ready for the lowdown on today's mortgage rates? Buckle up as we dive into the world of home loans!

With the 30-year mortgage rate average kicking off at 6.91%, many mortgage types are following suit and creeping up. Since lenders compete fiercely, it's crucial to scour the market and compare rates regularly. This goes for whichever kind of home loan you're eyeing.

Here's a snap of today's mortgage rate averages:

🏘️ 30-year new purchase mortgages: After a minor 4 basis point increase this past Friday, these rates have nudged their way back to a price point seen last in May 2023.

🏘️ 15-year mortgages: Just 5 basis points higher on Friday to hit an average of 5.96%. Still cheaper than the 6.31% reading from mid-April 2023, which marked a close-to-year high.

🏘️ Jumbo 30-year mortgage rates: Up by 6 basis points to an average of 6.90%. Although this number is lower than the 7.16% printed in mid-May 2023, it surpasses the 8.14% peak observed in October 2023.

The Weekly Freddie Mac Average

Are you curious about rates on the national front? Freddie Mac, our favorite government-sponsored mortgage loans purchaser, weighs in every Thursday. Last week, their published average ticked 1 basis point lower to reach 6.84%. However, in October 2023, Freddie Mac's average experienced a historic spike, surging to a 23-year peak of 7.79%.

Remember, the weekly averages published by Freddie Mac differ from our own Investopedia daily readings. That's because their methodology entails calculating a weekly average of five previous days' rates, whereas our daily average is a more accurate and up-to-date reflection of rate movements.

Fluctuations: What causes them?

Ultra-competitive battles among lenders, bank interest rates, government policies, and economic conditions are the key players behind mortgage rate rises and falls. Let's delve deeper:

  • Federal Reserve: This governs the federal funds rate, which—thanks to the magic of economics—indirectly influences mortgage rates. When the Fed lifts rates, you'll likely see mortgage rates shoot up.
  • Inflation: When prices go up, so do lenders' profit margins, leading to higher rates.
  • Supply and Demand for Mortgages: Steady demand can push rates upward, while low demand results in downward pressure.
  • Bond Market Activity: Mortgage rates and the bond market play a game of chicken, with higher yields leading to higher mortgage rates.
  • Economy: A vibrant economy often boosts housing demand and—you guessed it—rates.
  • Term Premium and Prepayment Risk: Hey, uncertainty doesn't come cheap. The term premium and prepayment risk affect rates, too.
  • Lender Profitability: Sometimes lenders bump up rates to hit their desired profit margins.
  • Personal Borrower Factors: Your credit score, loan amount, and down payment size can impact the rate you're offered.

In conclusion, mortgage rates are a dynamic dance of macroeconomic trends, fancy financial jargon, and individual borrower profiles. Keep an eye on these factors to stay ahead of the game when house-hunting.

[1] Mortgage Watch. (2023). What are mortgage rates? [Online]. Available: https://mortgage-watch.com/what-are-mortgage-rates/

[2] Harris, P. (2022). Why is the housing market so hot right now? [Online]. Available: https://www.cbsnews.com/news/housing-market-2022-prices-home-buying-tips-expert-advice/

[3] NBER. (2023). What happened to the housing market collapse? [Online]. Available: https://www.nber.org/system/files/working_papers/w27313/w27313.pdf

[4] Goldman Sachs. (2022). Goldman Sachs predicts mortgage rates to fall again by end of 2022 [Online]. Available: https://www.businessinsider.com/goldman-sachs-predictions-mortgage-rate-forecast-2022-6

[5] Myers, J. (2021). What is mortgage fraud, and how does it hurt my neighborhood? [Online]. Available: https://www.washingtonpost.com/realestate/2021/07/21/mortgage-fraud/

  1. As personal finance enthusiasts, it's wise to consider the impact of rising ico tokens on one's investment portfolio and a slower pace of investing in real-estate may be due while evaluating mortgage finance options.
  2. Diversifying investment portfolios can help mitigate the risks associated with high mortgage rates, making room for additional investments in crypto or other token-based projects.
  3. For property buyers using mortgage loans, understanding the factors affecting mortgage rates such as government policies, economic conditions, and inflation can help in making informed decisions when navigating the real-estate market and protecting their personal-finance interests.

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