Freddie Mac reported fixed rates for mortgages were up 5 basis point as of December 12, while the 5/1-year ARM rate was down 3 basis points.
The mild increase in fixed rates probably won’t discourage most homebuyers, but it could reduce affordability for some at the margins. It probably means that buyers are going to continue to demand price concessions from sellers, and it may mean some to opt for slightly less home than a lower rate could have afforded. Unlike the uptrend in rates this time last year, present rates increase are mild.
It might also lead some buyers to consider a cheaper rate with an ARM, although memories of the housing crisis and concerns about locking in an affordable rate will limit those who actually seek an ARM.
The rate for a 30-year fixed mortgage was up to 3.73% to its highest level in five weeks. The average for December to-date is 3.71%, just above the 3.70 of November and the highest since 3.77% in July.
The rate for a 15-year fixed mortgage was up to 3.19% to its highest level in five weeks. The average for December to-date is 3.17% and the highest since 3.20% in July.
The rate for a 5/1-year ARM was 3.36% and the lowest since 3.35% in the October 17 week. The average for December to-date is 3.38%, in line with recent months.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.