Mortgage rates rise for the week of September 8, 2014

Posted by  on Sep 15, 2014

Wake up at the back! After three weeks of what amounts to flat mortgage rates, you're forgiven for having dozed off. But now, finally, there's a bit of movement. So how significant are the latest changes?

Current mortgage rates: the numbers

Mortgage rates rose pretty much across the board, with the key rate, the one for 30-year fixed rate mortgages (FRMs), averaging 4.21 percent, up from 4.16 percent the week before. Points for these stayed the same at 0.15. How significant is all this? Well, not very, for three reasons:

  1. You only have to go back four weeks to find the same rate. They've been hovering around this level for about three or four months.
  2. If you use this site's mortgage calculators, you can see how insignificant this week's shift has been. On a $100,000 30-year FRM, your monthly payments would have been just $2.91 cheaper if you'd locked in your rate seven days ago instead of now ($489.60 today, compared with $486.69 last week).
  3. It seems unlikely (though nothing is impossible when it comes to mortgage and home refinance rates) that this is the start of an upward trend. The Washington Post ran a feature last week that discussed the firms that collect rate data on home loans and predict where they're going. It said, "most of them don't expect rates to change much any time soon, and they've adjusted their forecasts to reflect that."

Average rates for 15-year FRMs also rose this week, though by a little less: to 3.48 percent from 3.45 percent, with points also inching up to 0.12 from 0.11. Average rates for adjustable-rate mortgages (ARMs) increased too, with the 1/1 30-year ARM ending the week at 2.70, compared with 2.67 percent seven days earlier. Points for these fell to 0.17 from 0.19.

Timing your action

Assuming rates really are going to remain stable in the coming months, then the advice contained in that Washington Post feature is probably right: You're likely better off using this time to save a bigger down payment, to get your credit score as high as you can, and to pay down any debts you have to the lowest levels possible. Those actions could get you a significantly better rate when your moment comes.

However, be ready to act quickly if mortgage and refinance rates do begin to move decisively. The Federal Reserve reckons that those for 30-year FRMs have averaged 8.51 percent over the preceding decades, and they peaked at 18.45 percent. You might think it close to inevitable that we'll one day look back on this period as a golden age of cheap borrowing.

If you're already in a strong position to act, remember: Our live database of current mortgage rates can help you find the best mortgage rates in your area.


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