Mortgage rates rose during mid-December, according to a recent report. The numbers climbed the charts modestly during the week of December 11, 2017, which left few banks raising mortgage rates, to the benefit of homeowners as well as buyers.
The slight hike in mortgage rates for December placed the average lender on a better track to take advantage of a notoriously slow origination holiday period. The numbers from the second week of December increased just enough to re-establish the levels that experts saw during the previous week. Bonds, which are vital factors driving mortgage rates, weakened throughout the day on Monday, December 18, 2017.
The Mortgage Bankers Association’s Weekly Mortgage Applications Survey showed a 2.8% drop in mortgage applications for the week ending December 29. The numbers accounted for the Christmas holiday; however, on an unadjusted basis, applications were down 42% from the previous two weeks.
In all, 2017 fared well with respect to rising mortgage rates. Although, many expected rates to rise considerably after Donald Trump’s election in November, rates have so far remained relatively low from an absolute standpoint. Recent signs of growth present the possibility of more rate hikes in the future, however, which may result in higher mortgage rates for borrowers moving forward.
The number of loans being refinanced also dropped, with the Refinance Index falling 7% from two weeks previous. However, the Purchase Index jumped up 1% over the same period.
The amount of refinancing applications rose slightly to 52% of all originations, while purchase contracts remained steady over the holiday week.
The number of FHA loans also rose slightly to 10.4% of all applications, up from the 10.3% seen last week. Veteran’s Affairs share of applications jumped from 10.6% to 11.2% last week.
FHA 30-year fixed-rate mortgages held relatively steady at 4.17%, only a slight bump over the 4.15% of the previous week.
The average interest rate for a 30-year fixed-rate conforming mortgage held steady at 4.25% over the past couple of weeks, while the adjustable-rate share of mortgage applications decreased to 5.3% of all originations.
Jumbo 30-year fixed-rate mortgages dropped to 4.13%, from the 4.21% seen the previous week. The average interest rate for 15-year fixed mortgages decreased from 3.66% to 3.65%. Also, 5/1 adjustable-rate mortgages fell to 3.4% from 3.56% during the previous week.
With the potential for rates to continue an incremental increase in the coming months, it is a good time for consumers considering refinancing to explore their options. Although there is a shortage of inventory, buyers are in an excellent position to take advantage of low mortgage rates before the Fed decides on future increases.
With the recent tax-cut package taking effect January 1 hopefully spurring economic growth, and with it, rising rates, for those seeking purchase money or mortgage refinancing, now would be the time to explore what the market has to offer.