Mortgage rates are rising but it's still a good time to buy
By Lorainne Woellert
Mortgage rates rose for the second week, averaging 3.45 percent for a 30-year, fixed-rate loan, up from 3.42 percent the week before. A year ago, rates averaged 4.04 percent, according to Freddie Mac’s weekly survey.
Despite the uptick, rates have held below 4 percent since December, tying a 29-week run of cheap borrowing we had from November 2014 to June 2015.
During that sprint, the cost of a 30-year loan averaged 3.77 percent. This time, it’s held to 3.64 percent.
Mortgages got dramatically cheaper after Britain voted to exit the European Union last month. The Brexit brouhaha has since calmed down and Treasury bonds, which signal the direction of mortgage rates, have bounced from a 227-year-low.
Home loans are still cheap by any standard, though. That’s good news particularly for young and first-time buyers, who tend to be more sensitive to cost.
In a Redfin survey, 47 percent of buyers said they’d look for a less expensive house if rates rose by a point or more. Among respondents 34 and younger, more than half said they’d shop for something cheaper. Five percent of millennials said they’d give up looking altogether.
Rates are lower now than they were in May, when the survey was taken. That’s one reason June was one of the most competitive months on record for home sales, according to Redfin data.
Mortgage rates will tick up and down week to week, but they’ll stay low for the foreseeable future.
“We don’t expect any significant movement in mortgage rates in the near term,” Freddie Mac chief economist Sean Becketti said. “This summer remains an auspicious time to buy a home or to refinance an existing mortgage.”
Find the original article on Business Insider.