Today’s home buyers and refinancing households have reason to celebrate.
After a summer of rising mortgage rates, the market’s momentum has shifted. Conventional 30-year fixed rate mortgage rates have dropped to a near 4-month low.
It’s a good day to look at today’s mortgage rates.
Click here for accurate, real-time mortgage rates
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30-Year Fixed : 4.23% Nationwide
According to Freddie Mac, the average conventional 30-year fixed rate mortgage rate edged higher to 4.23% this week, a 0.01 percentage point increase from the week prior. The rate is available to mortgage applicants willing to pay 0.7 discount points at the time of closing.
A discount point is an up-front fee which lowers your mortgage rate. 1 discount point costs one percent of your loan size such that a loan with 1 point made at the Loudoun County, Virginia conforming loan limit of $625,500 with carry a cost of $6,250.
Discount points are optional. You can also to eliminate loan closing costs.
The Freddie Mac figures are based on actual mortgage rates available from 125 surveyed banks. The rates are reserved prime borrowers. “Prime” borrowers are ones making a 20% downpayment on a purchase; with low ; high credit scores; and ample reserves.
They’re also reserved for conventional loans. The Freddie Mac survey does not apply to FHA mortgages, VA loans for military borrowers, or USDA loans made nationwide.
Click here for accurate, real-time mortgage rates
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Mortgage Rates Lowest In California; Highest In Texas
Mortgage rates are dropping but, like everything in real estate, pricing varies by location. In addition to reporting on the national level, Freddie Mac’s weekly survey tracks regional mortgage rates, too.
This week’s results show wide differences in rate depending on where you live.
Homeowners in the West Region, for example, which encompasses California, Arizona, Nevada, Oregon, Washington, Utah, Idaho, Montana, Hawaii, Alaska and Guam, are getting access to the lowest mortgage rates nationwide.
By contrast, homeowners in the Southwest Region — a region which includes Texas, Louisiana, New Mexico, Oklahoma, Arkansas, Missouri, Kansas, Colorado, Nebraska and Wyoming — are getting the least low mortgage rates.
Broken-down by region, here are Freddie Mac’s surveyed mortgage rates :
- Northeast Region : 4.25% with 0.8 discount points, on average
- Southeast Region : 4.26% with 0.7 discount points, on average
- North Central Region : 4.23% with 0.7 discount points, on average
- Southwest Region : 4.29% with 0.6 discount points, on average
- West Region : 4.18% with 0.8 discount points, on average
Note that these rates apply to prime borrowers only. Mortgage rates for the HARP 2 mortgage program, or the Conventional 97 program may be slightly different. Your loan officer can help you with comparisons.
Click here for accurate, regional mortgage rates
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U.S. Government May Lead Rates Under 4 Percent
This month, mortgage rates have dropped and it may be the start of a longer-term trend.
Falling rates would help to make U.S. homes more affordable for today’s first-time and repeat buyers; and would open wanting to use the VA Streamline Refinance.
Falling rates would also give refinancing options to U.S. homeowners who purchased their home between June-August 2013 — a time during which mortgage rates were peaking. The ability to save one-half percent or more on your mortgage can make a giant long-term difference to your total mortgage interest paid.
For now, rates are Federal Reserve- and congressionally-influenced.
The Federal Reserve is currently purchasing $40 billion of mortgage-backed securities (MBS) on the open market, a stimulus program known as QE3. With QE3 in effect, the Fed is creating “bonus” demand for MBS which helps to hold MBS prices high.
Mortgage-backed securities are the basis for U.S. mortgage rates. When prices rise in the MBS market, mortgage rates drop, and this is how the Federal Reserve keeps mortgage rates in check. It doesn’t “fix” mortgage rates or “set” them, even — it provides demand for the instrument which is used to make today’s rates.
The Fed’s demand helps to keep mortgage rates suppressed and the longer QE3 lasts, the longer that mortgage rates are expected to stay low.
Rates are also getting a boost from the government shutdown. At an estimated cost of $160 million per day, the shutdown is slowing reducing U.S. economic output, and business and consumer confidence. This results is less spending and may harm long-term investment as well.
Wall Street has reacted by moving to “safe” asset classes until uncertainty subside.
Meanwhile, because mortgage bonds are among the safest places to park money, mortgage rates are down. Be ready, though — when the shutdown ends, mortgage rates are expected to rise.
Take A Look At Today’s Low Rates
Today’s mortgage rates look terrific. The Federal Reserve is keeping QE3 in place, the shutdown shows few signs of resolving, and Congress may be headed for a third drawn-out Debt Ceiling debate. U.S. mortgage rates are dropping.
However, each events could resolve quickly. QE3 could end without warning, the government shutdown may end, and Capitol Hill may reach a debt ceiling agreement. Closure would move mortgage rates up — likely in a hurry.
Therefore, don’t wait for rates to go lower. Take advantage of what the market gives today. Rates are available online and they’re free with no obligation. Compare your lender now.
Time to make a move? Let us find the right mortgage for you
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