Higher mortgage rates appear to have done some damage to the recovery of the housing market, with new home sales dropping by 13.4 percent in July compared to June. While existing home sales were better than expected, posting an increase of 6.5 percent, those figures represent settlements on homes that went under contract in May or June when mortgage rates were lower. We'll have to wait for next month's sales reports to see if rising mortgage rates are having an impact on the resale market.
Mortgage rates climb
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 16 basis points (0.16 percent) to 4.75 percent, the highest rate for this popular mortgage product since July 29, 2011. Average rates for 15-year fixed-rate mortgage loans rose by 15 basis points (0.15 percent) to 3.80 percent. FHA-insured, 30-year fixed-rate home loan rates rose by 11 basis points (0.11 percent) to an average rate of 4.36 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), moved up by 10 basis points (0.10 percent) to an average rate of 3.42 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Speculating on economic news
While economic reports remain mixed, speculation about the end of the Federal Reserve's quantitative-easing policy have been roiling the stock market and driving mortgage rates and other interest rates higher. The mortgage experts at HSH.com anticipate that mortgage rates will remain close to these high levels this week, with little or no change expected.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.