The Home Buyer's Korner

Information presented should be used for educational purposes only.

May 15th, 2015

Guy looking up in color

Average Mortgage Rates for May 14th, 2015


Interest rates on fixed-rate mortgages have moved higher for three consecutive weeks in spite of an economic stall. A better economy means higher interest rate, or at least that’s the way it’s supposed to work, but not these days! Home buyers are simply being taken to the robbed with higher interest rates. In this type of economic environment I’d normally tell home buyers to float their interest rate, but with Wall Street stealing from Main Street by increasing interest rates without any sound reasons I’d advise home buyers to lock-in now and to get screwed less.

Freddie Mac’s survey for fixed rate loans have increased three straight weeks and the most recent survey shows average rate for 30-year home loan went from 3.80 percent last week to 3.85 percent this week, even with all the bad economic news. The average for 15-year fixed mortgages rose to 3.07 percent from 3.02 percent.

Len Kiefer, chief economist with Freddie Mac said in a recent report that we are seeing an improvement in the economy, which drives mortgage rates higher. It makes you wonder what cloud he is living on.  The reports I’m seeing show a flat GDP, Retail Sales are down, Consumer Sentiment is negative, the U. S. Dollar is over the top, and our largest trading partner isn’t purchasing our goods and services because of the strong dollar. The economy is great if you’re part of the one percent and vacationing overseas, but for the rest of us who live every day on Main Street, enjoying the American dream these days is being taken way in the form of higher interest rates.

Kiefer further pointed to the labor market added 223,000 jobs in April, and called it a solid rebound from the dismal March numbers of 85,000, but failed to mention there’s no end in sight that job slack isn’t anywhere close and wages are up by only 2.2 percent when we need at least 3.0 percent.

Then Kiefer went on and pointed to the unemployment rate dipped to 5.4 percent and that far fewer unemployment claims for unemployment benefits were filed than economists had expected. What he doesn’t mention is that the dip has only been over the two weeks and the three weeks prior we saw consecutive increases. I’m sorry, but a marginal decrease in unemployment claims for two weeks doesn’t point the happier days as a stand-alone report.

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Each week Freddie Mac asks lenders about terms they are offer solid home buyers with stellar credit seeking mortgages up to $417,000. The survey provides a consistent gauge of mortgage trends, but actual rates may change rapidly and are influenced by many factors, including a home buyer FICO score, debt loads and down payments.


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