Mortgage Rates and Affordability Are Down
The most recent Freddie Mac Primary Mortgage Market Survey showed that we are now in uncharted territory with regard to home mortgage rates. The average 30-year fixed rate mortgage came in at 2.65%, the lowest rate in the survey’s history, dating back to 1971. 15-year fixed rate mortgages averaged 2.16%. Since then, rates have climbed up a bit, to 2.93% (30-year fixed) and 2.47% (15-year fixed), which is still at historically low levels.
Unfortunately, housing is not becoming more affordable as a result. House prices have risen faster than the home mortgage rates have fallen; average prices were up 7.9% in October compared with 12 months previous, and the National Association of Realtors is expecting new home prices to rise by 21% this year, while existing home prices will climb 9%. Those predictions might be higher than reality, however, since there is a chance that the foreclosure moratoriums in place today will be allowed to expire later this year.