Mortgage Rates Steady, Little Changed in Latest Survey

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Mortgage Rates
Ben Margot/AP
WASHINGTON -- Average U.S. long-term mortgage rates were stable to slightly higher this week, remaining near their lows for the year.

Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan was 4.13 percent, unchanged from last week. The average for the 15-year mortgage, a popular choice for people who are refinancing, edged up to 3.26 percent from 3.23 percent last week.

Mortgage rates are below the levels of a year ago, having fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term rates low.

The government reported Thursday that sales of new homes in the U.S. plunged by 8.1 percent in June, a sign that real estate continues to be a weak spot in the economy. Home sales had been improving through mid-2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates and meager wage growth.

At 4.13 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Fed has been trimming its monthly bond purchases. Fed Chair Janet Yellen told Congress last week that the purchases likely will end completely at the end of October.

But at the same time, Yellen said during congressional testimony that the Fed still sees the need to keep its benchmark short-term rate at a record low near zero to give the economy support.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
  • The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage rose to 0.6 point from 0.5 point last week.
  • The average rate on a five-year adjustable-rate mortgage increased to 2.99 percent from 2.97 percent. The fee rose to 0.5 point from 0.4 point.
  • For a one-year ARM, the average rate was unchanged at 2.39 percent. The fee held at 0.4 point.
11 Pluses and Pitfalls of Moving to an 'Up-and-Coming' Neighborhood
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Mortgage Rates Steady, Little Changed in Latest Survey
If you're not one of the first ones to "discover" a gentrifying neighborhood, prices may have already climbed too high due to real estate speculation.
You may be familiar with the mantra "buy the worst house on the nicest block you can afford," a strategy for landing yourself in a desirable neighborhood without breaking the bank. "Invest in an up-and-coming neighborhood" is its cousin. You can find a house that meets your needs in an emerging neighborhood for way less than a comparable home in a more coveted area -- and soon enough (if all goes well), your area may be just as desirable.
Up-and-coming neighborhoods don't always up and come. Sometimes, an area that looks promising just gets stuck where it is. Investing in a neighborhood in transition is a calculated risk -- so calculate it before you buy.
If you want to live in the heart of a big city, but don't have the cash to afford a place downtown, finding a transitioning neighborhood on its fringe could be just the solution. You'll be close to where the action is -- and the revitalization will mean there's plenty of action directly around you, too -- but you won't pay sky-high prices.
Emerging neighborhoods can sometimes have higher crime rates than more-established locales. There's a chance gentrification will reduce that in the future, butin the near term, you'll have to decide if you're willing to live in an area that might not be as safe as you're used to.
Since the area you're considering isn't on the radar of the wider home-buying public -- yet -- you could enjoy some serious value appreciation (especially if you do some good renovation work), netting you more money when you eventually sell.
If you have kids -- or plan to soon -- you'll want to evaluate the quality of the school district they'd be going into. Gentrification tends to upgrade the quality of the schools in a neighborhood, but they may not have improved enough for your comfort by the time your kids hit the classrooms.
Up-and-coming neighborhoods offer a certain "coolness factor," as hip young people and artists tend to be among the first wave of gentrifiers. If you enjoy patronizing independent businesses, dining at new restaurants, and riding the forefront of the latest trends, you could feel right at home.
If you're living in an area with a lot of artists or students, it may be too noisy or messy. Make sure to visit properties you're interested in at different points of the day (Sunday morning, Monday evening rush-hour) to get a feel for what it's really like to live there.
People who move to emerging neighborhoods often actively identify with their communities. They're looking for like-minded people who care about the place they call home. As a result, you may find a real community spirit, with neighbors who are eager to get to know each other, pitch in and help the area realize its potential.
There's likely no neighborhood association to govern the exterior upkeep of houses -- but you might consider this a plus, as lack of a covenant-controlled community also lets homeowners express their personal style more freely.
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