A small drop in mortgage rates last week may entice some refinancing homeowners to lock in their rates, but so far the recent rise in mortgage rates over previous week hasn't seemed to slow down the housing market. Mortgage rates have mostly been impacted by statements by the Federal Reserve indicating that the Fed will stop buying Treasuries and mortgage-backed securities in the future, although without setting an actual timeline.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan dropped by 5 basis points (0.05 percent) to 4.55 percent. Average rates for 15-year fixed-rate mortgage loans fell by 4 basis points (0.04 percent) to 3.64 percent. FHA-insured, 30-year fixed-rate home loan rates also declined by 4 basis points (0.04 percent) to an average rate of 4.18 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), also increased last week, dropped 2 basis points (0.02 percent) to an average rate of 3.33 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Sales of new homes rose by more than 8 percent in June, which may have been pushed higher by buyers looking to get their home under contract before mortgage rates rise higher. On the other hand, new home prices declined by 10.2 percent between May and June this year.
Existing sales declined by 1.2 percent from May to June, although prices rose by 13.5 percent. One issue may be that, even though resale inventory rose, it has been extremely low for several months.
The mortgage experts at HSH.com anticipate that mortgage rates will rise slightly this week depending on results from the Federal Reserve's meeting and the employment report for July.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.