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What's Ahead For Mortgage Rates This Week - July 1, 2013

By
Mortgage and Lending with The Michael Haigh Team NMLS# 200819

What’s Ahead For Mortgage Rates This Week – July 1, 2013The past week was active for economic news and mortgage rates. The aftermath of the Fed's indication that it may start dialing back its multi-billion dollar monthly purchases of Treasury and mortgage backed securities has sent mortgage rates to record highs.

If you're thinking of buying a home, this may be one last chance for finding the best deal on mortgage rates; meanwhile, home prices continue trending up as well.

Here's the scoop on last week's activity affecting real estate markets:

Tuesday's Case-Shiller Composite Indices for April demonstrate the momentum of recovery in many housing markets. As of April, national home prices had increased by 12.10 percent as compared to April 2012. April's reading also exceeded March's reading of 10.10 percent year-over-year.

FHFA released its home prices report for April and noted that the average price for homes with mortgages owned by Fannie Mae or Freddie Mac increased by 7.40 percent, which slightly surpassed the March reading of 7.20 percent.

The Department of Commerce released New Home Sales for May and reported 476,000 new homes sold on a seasonally-adjusted annual basis. This exceeded expectations of 453,000 new home sales and also surpassed April's reading of 454,000 new homes sold.

Wednesday brought the Gross Domestic Product (GDP) report for the first quarter of 2013. The GDP grew by 1.80 percent against expectations of 2.40 percent and the previous quarter's growth, also 2.40 percent.

Freddie Mac's Primary Mortgage Market Survey (PMMS) brought the days of bargain basement mortgage rates to a halt as average mortgage rates for a 30-year fixed rate mortgage moved from last week's 3.93 percent to 4.46 percent. Average rates for a 15-year fixed rate mortgage rose from 3.04 percent 3.50 percent. This was the largest weekly jump in mortgage rates in 26 years. 

Home buyers may also consider a 5/1 adjustable rate mortgage, which provides an average 5 year fixed rate of 2.74 percent.  The fixed mortgage rate converts to an adjustable rate after five years.

The National Association of REALTORS ® reported that Pending Home Sales in May rose by +6.70 percent to their highest level in 6 years.

Last week ended on a positive note with the Consumer Sentiment Index for June beating expectations of 83.0 and coming in at 84.1. May's reading was 82.1; higher consumer confidence is likely driving demand for available homes.

What's Ahead This Week

Next week's scheduled economic news includes Construction Spending due on Monday and the ADP private sector jobs report is set for Wednesday.

Thursday the financial markets are closed as we celebrate the July 4th holiday.

Friday brings the Department of Labor's Non-farm Payrolls Report and the National Unemployment Rate. If the unemployment rate stays steady at 7.60 percent, this may reduce fears that the Fed will start reducing its monetary easing program any time soon, which should help to slow the recent increases in mortgage rates.

 

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Comments (2)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Another thing to remember.

They (rates) go up very fast.

They come back down VERY SLOWLY.

Should we be hoping for continued high unemployment. 

That's pretty sad when you think about it.

Jul 01, 2013 07:58 AM
Michael Haigh
The Michael Haigh Team - Rocklin, CA
Production Manager/Top Producing Sr. Loan Officer

That is sad, Lenn. I think we've had a sustained period of low rates and the market, at least here in the SF Bay area, has been tumultuous. As a mortgage lender I see people buying homes at all times despite the rates! We'll have to see how it all plays out but I'm hopeful that it will include us being able to be happy unemployment is down and people are back to work! 

Best - Mike

Jul 08, 2013 05:11 AM