Thursday, June 27, 2013

30-Year Fixed Mortgage Rates Soar To 4.46%, Biggest Weekly Jump Since 1987

The average 30-year fixed-rate mortgage soared from 3.93% last week to 4.46% this week; the highest it has been since the week of July 28, 2011, according to a Freddie Mac Primary Mortgage Market Survey released today.  The fix mortgage rate jump is the largest weekly increase for the 30-year fixed since the week ended April 17, 1987.  


Freddie Mac analysts attribute the fixed mortgage rate increase to an increase in bond yields amid recent Fed remarks that it could begin tapering its bond purchases later this year. 


"Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong," said Frank Nothaft, vice president and chief economist for Freddie Mac.

 
The 15-year fixed mortgage rate saw a more subtle increase, however.  This week averaged 3.50% with an average 0.8 point, up from last week when it averaged 3.04%.


The mortgage rate increase is good news for Wall Street private investment companies that are quietly buying up Florida real estate in all-cash transactions as potential Main Street buyers are priced out of the market due to rising monthly mortgage payments.


“We remain concerned about the rise in the percentage of sales accounted for by all cash buyers,” said Florida Realtors Chief Economist Dr. John Tuccillo last week.  "These numbers understate the true condition of the market in that a great many sales are conducted directly with the financial institution holding the property, and thus do not appear in the Multiple Listing Service (MLS)."


“But those crying doom-and-gloom who read this growth in investor activity as the sign of a new bubble are far off-base and simply don't understand the texture of the current market,” Tuccillo added.


SIMILAR STORIES:

Florida Home Sales See Double Digit Increase