Outside of the internet, it seems like many people don’t like cats. They’re misunderstood creatures; they only want attention when no one seems to be looking, and when you finally do get to pet them, they usually run away at a moment’s notice for seemingly no reason. I find them very similar to mortgage rates for this reason. When the rates are low no one seems to notice, and when acknowledged, they rise slowly for a month. That’s what’s been happening for six weeks now as described by the Primary Mortgage Market Survey. We ignored the rates while they were at record lows and, like a scornful kitten, they’ve been climbing up a tree for weeks now. It’s a sign saying to get a low mortgage rate while you still can. The metaphor is getting cluttered as time goes on; read the raw numbers of how the rates changed straight from Freddie Mac:
30-year fixed-rate mortgage (FRM) averaged 3.98% with an average 0.7 point for the week ending June 13, 2013, up from last week when it averaged 3.9%. Last year at this time, the 30-year FRM averaged 3.7%.
15-year FRM this week averaged 3.10% with an average 0.7 point, up from last week when it averaged 3.03%. A year ago at this time, the 15-year FRM averaged 2.98%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79% this week with an average 0.6 point, up from last week when it averaged 2.74%. A year ago, the 5-year ARM averaged 2.80%.
1-year Treasury-indexed ARM averaged 2.58% this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.78%.
If you’re not a cat person, that’s alright. Mortgage rates are for everyone, so there’s no excuse to avoid these rates while they’re still so low. Excuses like “I’m allergic to mortgage rates,” or “Mortgage rates are only cute when they’re kittens” will simply not fly, for a ton of reasons. Cats aside, read this quote from Frank Nothaft, vice president and chief economist of Freddie Mac, for a more in-depth analysis of fluctuating mortgage rates.
“Fixed mortgage rates crept up further this week following a solid employment report for May. The economy added 175,000 new jobs and the number of discouraged workers fell by 780,000 to the fewest since September, 2009. And although the unemployment rate ticked up to 7.6%, it was due to a 420,000 increase in the size of the labor force; the underemployment rate fell from 13.9 to 13.8% in May.
“With the ongoing run up in fixed mortgage rates, adjustable-rate mortgages (ARMs) are becoming more popular among homeowners looking to refinance and for home purchasers. The 30-year fixed mortgage rate this week is 0.6 percentage points above the recent low set over the week ending May 2. In comparison, the share of conventional mortgage applications for ARMs rose from 13% of dollar volume at the beginning of May to 17% last week, according to the Mortgage Bankers Association.”
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