Lowest fixed mortgage Rates
Mortgage rates are still near the elevated levels previously reached in June, according to the NerdWallet Mortgage Rate Index. Thirty-year home loan rates hit all-time lows in July.
Recovering economy likely to spur higher mortgage rates
With the U.S. economy expanding at a 2.9% annualized rate in the third quarter, beating forecasts, expectations of rising interest rates are growing. Steve Hovland, director of research at HomeUnion, said a rate hike by the Federal Reserve in December is “highly probable.” The increase in short-term rates would be the first since December 2015.
“A resumption of normalizing monetary policy after a year-long hiatus is highly probable. Therefore, the era of record-low mortgage rates will begin to come to a close in the coming months, ” Hovland said in a research note released Friday.
The bond market is already giving signals of such a move, as 10-year Treasury rates recently climbed to their highest levels in five months, “putting upward pressure on mortgage rates, ” he added.
“For both single-family rental investors and first-time buyers, higher interest rates will further tighten inventory across the nation, ” Hovland said. The recent increase in the homeownership rate will be “a blip on a downward trend that extends into 2017.”
NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.
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