Mortgage rates stick close to all-time lows
Mortgage rates have ticked up to an average 2.93% for a 30-year fixed-rate loan, from 2.91% last week, mortgage company Freddie Mac said Thursday.
One year ago, the typical 30-year mortgage was going for a steeper 3.49%. The loans in the survey come with an average 0.8 point.
Rates remain just a few steps away from last month's record low in the Freddie Mac survey, which has been tracking rates on home loans for nearly half a century. Thirty-year fixed-rate mortgages sank to an average of just 2.88% on Aug. 6.
A buyer wanting a $2,500 monthly house payment could afford a $516,500 home this summer, versus a $483,250 house that was affordable on the same budget during the summer of 2019, when rates were higher.
Even so, homebuyers are often having difficulty finding something in their price range.
"Because there hasn’t been an increase in the number of homes for sale since rates started dropping with the onset of the pandemic, many buyers end up competing for the same homes, driving up prices," says Daryl Fairweather, chief economist at Redfin.
The nation's median listing price last month hit a record $350,000 — up 10% from a year ago, says new data from Realtor.com.
The clock is ticking on extremely low rates
Homebuyers hoping to take advantage of mortgage rates at unbelievably low levels may not have much more time, and the same goes for homeowners looking to score big savings by refinancing.
Rates popped in mid-August after lenders were surprised to learn that a new 0.5% on refinance loans would take effect on Sept. 1. Following some uproar, a federal agency postponed the surcharge — but not for long.
"Mortgage rates could begin to see modest increases once lenders begin to reapply the price adjustment," says Matthew Speakman, an economist with Zillow. "For now, mortgage rates are enjoying another strong stretch back to long-term lows."
Though the fee is technically delayed until Dec. 1, experts say lenders could start to factor it into their rates as soon as next month. So, if you're thinking about shopping for a home or are a homeowner who needs to refinance, you'll want to move fast.
Start comparison shopping for a bargain rate now. Get mortgage offers from at least five lenders and review them side by side, to find the lowest rate available to you.
Your credit score will play a major role in what lenders offer you, says Speakman.
"These record low rates only apply to the most creditworthy borrowers with straightforward loans — people with weaker credit or seeking less typical loan types are being quoted much higher rates," he says.
Be sure to comparison shop for your homeowners insurance, too. When it's time to buy or renew your policy, go online and seek rate quotes from several insurers so you don't overpay for your coverage.
What other mortgage rates are doing
The latest Freddie Mac survey shows rates on other popular types of mortgages are mixed this week.
The average for a 15-year fixed-rate mortgage has fallen to 2.42%, from 2.46% last week. Fifteen-year mortgages are a popular pick for refinance loans, and the rates are down quite a bit from a year ago, when the average was an even 3%.
Meanwhile, rates on 5/1 adjustable-rate mortgages, or "ARMS," have risen a few notches. The rates on those loans are fixed for five years, then can adjust up or down each year, depending on how other interest rates are moving.
ARMs are currently being offered at starter rates averaging 2.93%, up from 2.91% last week.
At this time in 2019, the typical initial rate on a 5/1 ARM was 3.30%.
Take a look at today's top mortgage rates where you are: