Climbing interest rates likely to continue to affect market outlook
June 17, 2013
Should mortgage rates continue to bump up as they have been in recent weeks, many experts' predictions of substantially strong homebuying during summer may come to fruition.
There was a notable boost in the average for 30-year fixed-rate mortgages, as it rose to 3.98 percent during the week ending June 13, a report from Freddie Mac explained. The previous figure was 3.91, while one year earlier was much lower, as it averaged 3.71 percent.
The 15-year FRM average also grew markedly, jumping to 3.1 percent, the government-sponsored enterprise's Primary Mortgage Market Survey explained. One week previous, the average was 3.03 percent. This was still slightly higher than a year earlier, as that was 2.98 percent.
With continued high mortgage rate averages, coupled with other improving conditions such as prices and home sales, there may be more work for brokers and lenders. With this in mind, more consumers may be looking for home loans, which could cause some problems for firms looking to close faster. In order to alleviate this and seek out closing solutions, it may be a good idea to speak with Linear Title and Closing.
"Fixed mortgage rates crept up further this week following a solid employment report for May," said Frank Nothaft. "The economy added 175,000 new jobs and the number of discouraged workers fell by 780,000 to the fewest since September 2009. And although the unemployment rate ticked up to 7.6 percent, it was due to a 420,000 increase in the size of the labor force; the underemployment rate fell from 13.9 to 13.8 percent in May."
Mortgage applications rebound in early June
While mortgage rate averages continue to make strides, the home loan application situation has sputtered as of late. However, in the most recent measurement, the figures recently started to make a comeback.
Mortgage applications rose 5 percent during the week ending June 7 compared to the previous measurement, a report from the Mortgage Bankers Association showed. There also was a 5 percent gain in the firm's Purchase Index, a reading in its Weekly Mortgage Applications Survey.
Meanwhile, loan modifications increased 5 percent, as noted in the Refinance Index, the report added. There also was a slight improvement in overall mortgage activity, as it rose to 69 percent of all applications during the week, one percentage point higher than the previous figure.
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