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Mortgage Rates Pop To 7-Year Top

By Dan Green

Mortgage rates have zipped to a 7-year high, with most of the action coming in the last 14 days; An update on today’s mortgage rates and the current 5-day trends; and, why real estate headlines aren’t always the best place to get your news — especially when it comes to new construction housing.

Mortgage Rates Move To 7-Year High

Monthly housing costs are up sharply from January 1 - Growella
Monthly housing costs are up sharply from January 1

It’s a tough time to be mortgage shopping.

According to Freddie Mac, 30-year fixed-rate mortgage rates moved to 4.61% this week, on average — their highest levels since 2011.

The data is part of the group’s Primary Mortgage Market Survey, a weekly summary of the U.S. interest rate landscape as reported by approximately 125 lenders nationwide; a group comprised of large retail banks, mid-size mortgage lenders, and credit unions.

Survey results are just an average.

Some borrowers will be quoted lower rates than what Freddie Mac reports, and others will be quoted higher. Plus, mortgage rates are affected by about a dozen external factors which could move your rate up or down.

No matter what type of rate you need, your quoted rate will be higher as compared to the start of 2018.

Since January 1, 30-year mortgage rates are up roughly 0.625 percentage points, adding forty dollars to payments per month per hundred thousand borrowed, and lowering the amount of house a buyer can afford by 8 percent.

Here’s how purchasing power has changed since the New Year:

Meanwhile, home values are rising, up seven percent in the last year. Combined with rising interest rates, home buyers are finding it harder to find an affordable place to live.

It’s not a time to panic, however. Don’t feel rushed to buy.

Mortgage rates are unpredictable and there are under-valued homes are available for sale via the MLS. So, get with a real estate agent who can help you find those homes and a mortgage loan officer who can help you get qualified to buy that house.

It’s a challenging time to find and buy homes, but plenty of people are doing it. And, you can, too.

Get started with a loan pre-approval letter here.

Today’s Mortgage Rates & Trends

Mortgage rates and 5-day interest rate trend - Growella
5-day mortgage rate trend

Mortgage rates are falling today.

For first-time home buyers, repeat buyers and real estate investors, and refinancing households, the cost of carrying a mortgage is down as compared to 24 hour ago.

Here’s what mortgage shoppers can expect from today’s loan estimates and interest rates as compared to Thursday:

The actual rate you receive from a lender will be based on about a dozen factors including your loan size, your credit score, and the state in which you live; and also your choice in loan programs.

FHA mortgage rates differ from conventional ones and closing costs matter, too.

Loans with discount points and a full set of fees come with lower mortgage rates as compared to loans with no points; and, loans with no closing costs to pay whatsoever.

In general, choosing to do a zero-closing mortgage on a $250,000 loan will raise your rate by a quarter-percentage point as compared to a loan with no points.

Always shop with two or more lenders and find your best combination of rates, fees, and service.

Get Today’s Mortgage Rates

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Housing Starts Increase For 2nd Straight Month

Housing Starts data from the U.S. Census Bureau - Growella
Housing Starts data from the U.S. Census Bureau

With real estate news, you can’t always trust the headlines. The Census Bureau’s Housing Starts reports proves an excellent example.

A housing start is when a builder breaks ground on a building. Starts are measured by units in the structure such that:

And so on. Breaking ground on a 10-unit apartment building is equal to 10 units, and breaking ground on a 100-unit apartment building is equal to 100 starts.

This is where the Housing Starts report can be misleading.

The Census Bureau categorizes housing starts into three groups — single-family starts, multi-unit starts, and apartment building starts — but business reporters often do not.

Reporters lump all three categories into one, which renders the data mostly worthless to everyday buyers and sellers of homes trying to inform a better home buying decision.

Individuals like you and me don’t buy apartment buildings of 100 units. Which is why it doesn’t matter that the headlines says Housing Starts are down. They’re only down because fewer apartment buildings broke ground in May.

Single-family housing starts is what matters to most buyers and, for March, single-family starts climbed to regain its 6-month moving average.

The headlines won’t tell that story. Your real estate agent will.

Written by Dan Green

Dan Green is a mortgage lending expert and the founder of Growella. Prior to Growella, Dan was a six-time, top-producing loan officer; and, ranked repeatedly among the top 1% of loan officers nationwide. Dan's home buying expertise has been in print and on TV with The Wall Street Journal, NPR, Forbes, CNBC, and others.

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