As real estate conditions continue to improve nationwide, a few simple signs give proof that the worst may be behind the new homes market. Below, Jeff Clabaugh, with the Business Journal writes about current mortgage rates and credit conditions:
The residential real estate industry is counting on low mortgage rates to stimulate sales, but long-term borrowing costs inched up this week, according to Freddie Mac.
Freddie Mac (NYSE: FRE) says a 30-year fixed-rate mortgage averaged 4.79 percent in the week ending June 3, up from 4.78 percent last week, just above the lowest levels of the year.
A 15-year fixed-rate mortgage averaged 4.2 percent, the lowest since Freddie Mac began tracking 15-year mortgages in 1991.
A one-year adjustable-rate mortgage was unchanged at 3.95 percent, considerably lower than the 4.81 percent one-year ARMS were averaging a year ago.
“There are also signs that credit conditions may be improving,” said Freddie Mac chief economist Frank Nothaft. “The number of homeowners with private mortgage insurance who became current on their mortgages outnumbered those who defaulted for the third month in a row in April, according to the Mortgage Insurance Companies of America.”
Pending sales of existing homes in April rose 6 percent, the third straight monthly increase, reaching the highest levels in six months, the National Association of Realtors reported this week.
The homebuyer tax credit expired at the end of April, leaving low mortgage rates as the main incentive for buyers entering the market.
Read the original article: Freddie Mac: Mortgage rates edge higher – Business Journal