Interest rates on fixed-rate mortgages, the most common and traditional type of loan homeowners take out to finance the purchase of their houses, have experienced a slight increase on a week-over-week basis.
Freddie Mac, a government-sponsored enterprise that helps promote liquidity in the national residential mortgage industry, conducts a weekly survey of banks and other lenders to ascertain mortgage rate levels. Based on survey results from the January 29th Primary Mortgage Market Survey, interest rates on 30-year fixed-rate mortgages have inched up to 3.66%. This represents a 0.6 percentage point increase compared to what the average mortgage rate was the week prior. This is a change compared to the trend established at the beginning of the year, which showed that mortgage rates for 30-year term loans were on a downward course. Note that these figures exclude the impact of other fees and points associated with obtaining a residential loan.
Freddie Mac and its Deputy Chief Economist, Len Kiefer, attribute this uptick in rates to positive news in the residential real estate market. Recent reports have showed that more consumers have purchased new and existing homes than industry experts had anticipated, and has exerted downward pressure on the national housing supply. Per a January 27th U.S. Census and Housing and Urban Development joint release, sales of newly constructed single-family houses in December increased 11.6% over the number of units sold in November of last year. The December figure also represented an 8.8% increase above what analysts expected to be sold in December as well. Existing home sales have reflected this general trend too, according to the National Association of Realtors. Closings for various types of dwellings, including single-homes, townhouses, co-ops, and condos, have grown 2.4% in December compared to the month before.