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U.S. Mortgage Rates Continue to Increase, Reaching a New All-time High Since 2011


Despite some of the experts’ prediction that the mortgage rates will stabilize this fall season, the rates for home loans continue to surge together with the yields in the broader bond market. This new movement achieved a new recent high for the last five years, raising some doubts and questions of its impending whirlwind effect in the housing market.

The Surging Rates

According to the latest data released by Freddie Mac, the 30-year fixed mortgage rates increased up to 4.72% in late September compared to the 4.65% in the month prior. The said new record not only hit its fifth-straight weekly gain but also took it to the highest level since April 2011.

According to the financial experts, the mortgage rates increase together with the U.S. 10-year Treasury note up to 0.06% for the past week as more and more investors braced for the impact of the Federal Reserve’s plan to raise the short-term interest rates for the third time before the year ends.

The said Federal announcement caused a flurry in the housing data in the real estate and mortgages industry according to the experts.

Way back in August, the sales for the existing home and real-estate properties were flat, while the sales for the new homes went a little bit higher. However, the sale tallies for the past few months marked a sharp downfall from their initial estimates as the home contract signings continue to swoon.

Despite these declining performances, the economists remain optimistic that the mortgage rates will still stabilize and the house sales and ownership will increase as the housing market re-assert themselves.

The Projection

According to Sam Khater, Freddie’s chief economist, the consumer’s confidence in purchasing a house remains high and strong for the last 18 years. Aside from that, the job gains to hold steady. This means more and more Americans continue to land a job as the unemployment rate continues to decline.

He has no doubt these two crucial factors will help increase the consumer’s purchasing power, which will keep the housing demand up in the next coming months.

Despite these predictions, some consumers say only time will tell how the mortgage rates to perform to be in favor to the buyers.

Meanwhile, Lawrence Yun, the chief economist at National Association of Realtors, pointed the same signs that homeowners have the capability to buy a house and put their properties on the market. Yun claims as long as the prices are in moderation and there is job growth, the rising mortgage rates will not hinder any workers from availing a home purchase.

He also adds that more job creations mean having a second or third source of income, which gives consumers the financial confidence to avail a mortgage. But as long as it’s not happening yet, Yun says more people may opt to rent for a while until they can afford the house prices.

Tips to Save For Your First Home Purchase

If you still plan to make your first home soon, the experts recommend these tips to help you save the necessary money or downpayment:

Shop for the Best Mortgage Rates Online

According to the experts, it’s important you browse and canvas through several mortgage lenders to determine the best mortgage offers out there. Most lenders nowadays not only compete in beating the best price but also in giving out features and perks like streamlining the application process. Look for a house you want to buy and determine which lender has the best offer in the market.

Make a Budget and Stick to It

The financial experts recommend you use the mortgage calculator to determine your costs and expenses

Now that you’ve chosen a mortgage lender to buy your house, you need to reassess your budget to determine how much money you need to allocate for your mortgages. It’s important for you to stick to that and saving habits since you’re not only paying for mortgages, but you also need to save some money to pay the upfront fees or place a downpayment.

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