30-Year Fixed-Rate Mortgage Ends Year at Its Highest Level since July

30-Year Fixed-Rate Mortgage Ends Year at Its Highest Level since July

Mortgage rates increased, following a rise in Treasury yields.

Prices on the 10-year Treasury note fell this week in response to an uptick in oil prices, pushing yields higher as a result. The 10-year yield rose from around 2.22% Monday to 2.32% Wednesday.

Mortgage rates usually follow the direction of yields on long-term government bonds.

Home prices creep higher

National home prices inched up 0.9% — after seasonal adjustment — from September to October, according to the latest S&P/Case-Shiller home-price index. Prices increased 5.2% over the same month in 2014. And once again, Denver, San Francisco and Portland, Oregon, and were the 3 cities with double-digit price gains year over year.

“The price gains are spread across the nation, as every one of the 20 large metro areas that are reported posted an increase in October, using the seasonally adjusted data,” says Joel Naroff, president and chief economist for Naroff Economic Advisors in Holland, Pennsylvania.

Price appreciation should happen at a slower pace in 2016, says Pava Leyrer, chief operating officer for Northern Mortgage Services in Grandville, Michigan.

“I think housing prices are going to get a little better in our area,” she says. “I don’t think they’re going to go exponentially higher so fast that it causes a different type of problem.”

A look at this week’s rates

  • The benchmark 30-year fixed-rate mortgage rose to 4.15% from 4.12%, according to Bankrate’s Dec. 30 survey of large lenders. A year ago, it was 3.99%. Four weeks ago, the rate was 4.01%. The mortgages in this week’s survey had an average total of 0.25 discount and origination points. In 2015, the 30-year fixed averaged 3.99%. This week’s rate is 0.16 percentage points higher than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage rose to 3.39% from 3.33%.
  • The benchmark 30-year fixed-rate jumbo mortgage rose to 4.1% from 4.03%.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.49% from 3.44%.

Weekly national mortgage survey

Results of Bankrate.com’s Dec. 30, 2015, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed15-year fixed5-year ARM
This week’s rate:4.15%3.39%3.49%
Change from last week:+0.03+0.06+0.05
Monthly payment:$802.07$1,170.66$740
Change from last week:+$2.88+$4.83+$4.59

At 4.15%, the 30-year finishes the year at its highest level since the July 15 survey, when it was 4.17%.

Pending home sales slide

Pending home sales fell 0.9% in November, according to data released Wednesday from the National Association of Realtors. The index is 2.7% higher than it was in November 2014.

“November’s pending sales is a concerning number,” says Michael Becker, branch manager at Sierra Pacific Mortgage in White Marsh, Maryland. “They were expected to go up seven-tenths of a percent month over month, and they went down nine-tenths. Much, much worse.”

However, last month’s number could end up being an outlier, Becker adds.

Shape up for 2016

As you prep for the new year, keep your creditworthiness top of mind, Leyrer says.

“Be responsible; understand your credit (and) make sure that you have it in an area that you want it in order to get your loan,” she says.

And just because mortgage rates have inched up doesn’t mean there’s reason to worry — yet. On a typical $200,000 to $250,000 loan, a rate increase of one-eighth of 1% will likely increase your monthly payment by only $15 to $20, according to Becker.

“That shouldn’t be a make-or-break deal,” he says.


Source: BankRate.com

Barbara Reaume

Barbara Reaume is a real estate expert working for Coldwell Banker Montecito. She started her career as a real estate agent in 1984 and offers over 3 decades of experience in real estate sales. Specialties include Montecito real estate, Santa Barbara real estate, Santa Barbara homes, real estate financing In Santa Barbara, Montecito relocation, Santa Barbara relocation, short sales and foreclosures. Do you have specific questions about buying or selling real estate in the Santa Barbara area? Ask to be setup on Barbara's email-based home search to get instant alerts on price reductions and new Santa Barbara homes for sale in the area. Contact Barbara Reaume by email ([email protected]), phone (805-610-5403) to find out the value of your home, discuss your options.

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