After 5 Weeks Of “No Change”, Mortgage Rates Ready To Rocket Higher

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Looking at trends in mortgage rate, this week may be your last chance to lock in low rates.

Click here to get a mortgage rate.

Mortgage Rates Have Failed To Break Below 4%

Each week, government mortgage-backer Freddie Mac issues its Primary Mortgage Market Survey, a recap of mortgage rates as issued at than a hundred banks nationwide. The survey comprises both purchase and refinance transactions, while ignoring “special” loans such as the HARP Refinance or jumbo-conforming loans.

According to Freddie Mac, the average 30-year fixed rate mortgage is now 4.00 percent nationwide — roughly the same reported rates as from the last 5 weeks. 

During this time, mortgage rates have only moved within a tight range of 3.97 and 4.02 percent, and require an accompanying 0.7 discount points plus “typical” closing costs.

Closing costs vary by state. Tennessee and South Carolina are cheap, for example; California and Virginia are high. And, 1 discount point is equal to 1 percent of your loan size — those costs apply to everyone.

Stated differently, although Freddie Mac puts rates at 4.00%, to get that rate, mortgage applicants  should expect to pay a complete set of closing costs, inclusive of discount points. The larger the loan, the higher the costs.

“Low-fee” and “no-fee” loans are available, too — typically in exchange for a slightly rate. But not for long.

Zero-cost mortgages are about to be extinct.

Mortgage Rates Differ By Region, Says Freddie Mac

A breakdown of the Freddie Mac survey shows that interest rates and discount points vary by region. Typically, states in the West Region offer borrowers the lowest rates but with the highest closing costs. The East Region states work in reverse; rates are often highest but the accompanying points are fewest.

The most recent mortgage rate breakdown by region shows :

• Northeast Region : 4.00% with 0.7 discount points 
• West Region : 3.96% with 0.8 discount points
• Southeast Region : 4.06% with 0.9 discount points
• North Central Region : 3.97% with 0.7 discount points
• Southwest Region : 4.04% with 0.7 discount points

Most notable, though, is that in all 4 regions, mortgage rates are well below their 2011 highs. 

Since mid-April, mortgage rates have been in descent, dropping for 5 consecutive months before falling to their current, “rock-bottom” levels, a price point reached in early-November. Since then, however, rates have idled.

See, the forces that combined to drop rates to these levels are subsiding. The U.S. economy is showing signs of a rebirth; the Eurozone is edging closer to solvency; and the housing market is recovering. These are all negative forces on low mortgage rates.

So, if you’ve been wondering whether now is a good time to refinance, or whether higher rates will harm home affordability, the answer is yes.

Click here to get a mortgage rate.

Lock In Mortgage Rates Before 2012

When mortgage rates idle for 5 weeks at a time, it signals that the market is wound. There remains no clear conviction on which way the economy will go but, unlike in 2009, 2010 and early-2011, there’s economic optimism.

The mortgage market is loaded with 3 years of negative expectations. Once those forces reverse, they’ll reverse quickly. And mortgage rates will soar.

At this point, it’s time to stop waiting for lower rates. It doesn’t look like they’ll ever arrive

Click here to see today’s rates.