Mortgage Rates Tick Down But Can Borrowers Seize The Opportunity

Dated: July 23 2018

Views: 271

Homes For Sale Ahead Of Existing Home Figures

Rates for home loans ticked down as the bond market moved sideways and the housing market made little headway.

The 30-year fixed-rate mortgage averaged 4.52% during the July 19 week, down one basis point, according to the weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.00%, down from 4.02%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, up one basis point.

Those rates don’t include fees associated with obtaining mortgage loans.

Mortgage rates follow the trajectory of the 10-year U.S. Treasury note. Bond yields have been subdued in recent weeks as Washington [ratchets] up a trade war, nudging investors to seek safe haven assets. Bond yields fall as prices rise.

Bond strategists have mixed views on whether the recent rebound is temporary or likely to persist. Some think underlying fundamentals, like rising inflation, will re-assert themselves as trade war rhetoric cools down. But others viewed testimony from Federal Reserve Chair Jerome Powell Tuesday as a signal that the central bank sees an end to interest-rate increases coming sooner than markets may expect.

In the housing market, meanwhile, there’s little momentum up or down. Lower rates are a boon to borrowers, but no help if there’s still not enough inventory to satisfy years of pent-up demand. Data from the Commerce Department Wednesday showed home builders are in no hurry to ratchet up their pace of construction.

Many economists and housing-watchers think the current cycle has run its course, but there’s less agreement on exactly what that means.

Also on Thursday, the Joint Center for Housing Studies of Harvard University released a report showing that homeowner remodeling expenses will rise more than 7% this year. That’s thanks to surging levels of home equity and a rosier economy – but it’s also a reflection of the lack of homes available.

Buyers who want to move up to a nicer home or downgrade to a smaller one may be forced to remodel and make do with what they’ve got instead. That means annual spending on residential improvements and repairs by homeowners could reach nearly $350 billion by the middle of next year, the Harvard group said.


Blog author image

Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....

Latest Blog Posts

6 Projects To Banish Boredom From Your Yard

We're all about indulging in Starbucks' latest seasonal concoction or this season's "it" bag. (OK, maybe a knockoff version of this season's "it" bag.) Trends are just plain fun — and they keep

Read More

How To Renovate Tight Living Quarters Without Cutting Corners

If you live in a small space, you’re used to having to come up with clever solutions to maximize your home’s potential. So whether you’re looking to renovate a studio apartment or small house,

Read More

Are You Making One Of These 7 Landscaping Mistakes

You can just picture it: a pretty cottage garden overflowing your front yard, with tons of heavy, scented blooms.Well, at least you can picture it with your eyes closed. With your eyes open all you

Read More

Fannie And Freddie Set Dates For Their New Refi Option

The Federal Housing Finance Agency didn’t have a set date for its new refi option targeted to low-income borrowers when it announced the program last week. But on Wednesday, both Fannie Mae and

Read More