Home loan interest rates continue their moderate changes seen last week according to rate reports supplied by loans.org.
Although this week’s interest rates changed more than last week, when two out of three rates remained the same , it was minimal. For the week leading up to Thanksgiving Day and ending on Nov. 27, 2013, the 30-year fixed rate mortgage averaged 4.16 percent. This rate was a small four-basis-point increase from one week prior.
The 15-year FRM made a similar gain, shifting from 3.11 percent to 3.15 percent this week.
The final home loan interest rate, the 5/1 adjustable-rate mortgage, increased only two basis points from 2.72 percent to 2.74 percent.
Even though the rates have stabilized in the past three weeks, there are still significant differences on a state-to-state basis. For example, an average mortgage loan on a $250,000 home in Idaho would cost less than it would cost in Ohio.
An average 30-year fixed mortgage in Idaho would be at a 4.13 percent interest rate. In comparison, the average home loan interest rate on a similar mortgage in Ohio is 4.27 percent.
Over the course of 30 years, a borrower in Idaho would repay a total of $436,446, whereas a borrower in Ohio would repay a total of $443,800.80. The small 14-basis-point difference would equate to a price difference of $7,354.80 over the course of a 30-year loan.
Beyond statewide differences, there are several factors impacting the housing market on a national scale including a negative existing home sales report, a slow holiday season and the addition of Janet Yellen at the Federal Reserve Bank of New York.
During October, total existing home sales fell 3.2 percent to a seasonally adjusted rate of 5.12 million according to the National Association of Realtors (NAR). Single-family home sales fared even worse, reducing 4.1 percent to an adjusted annual rate of 4.49 million. Despite the declines, both rates are higher than those posted one year prior.
Karyn Glubis, a realtor in the Florida area, is not surprised by the findings, stating that October is usually a slow month overall.
“Kids go back to school in September so people are staying put instead of moving,” she said but added that some buyers will return to the market in November. But any increase is likely to be minimal. Large shifts are uncommon from November to early January.
One final impact on the housing market is the change in command as Yellen takes over her position as Fed Chairman. Anytime a new chair changes, markets can be impacted according to Dan Gjeldum, senior vice president of mortgage lending at Guaranteed Rate.
The new leadership is expected to be positive for the housing industry, home loan interest rates and for consumers.
“Yellen is widely considered to be good for housing as she is of the belief that until the economy improves by the metrics put in place by the Fed, the Fed will not begin tapering their bond buying,” Gjeldum said.