Fixed Rates Spike This Week While Adjustable Rates Mellow
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UPDATED: Feb 8, 2021
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Fixed rates grew significantly this week while adjustable rates remained calmed, according to rate reports provided by loans.org.
For the week ending on Aug. 22, 2013, the 30-year fixed-rate mortgage averaged 4.55 percent, a 21 basis point increase from last week’s rate of 4.34 percent.
The 15-year FRM averaged 3.51 percent, another significant increase from 3.33 percent set last week.
Although large basis point increases were seen in the fixed spectrum, smaller changes occurred for the adjustable rates this week. The 5/1 adjustable-rate mortgage meagerly increased from 3.19 percent to 3.23 percent this week.
In addition to the steadily rising mortgage interest rates, the housing market is strengthening in overall sales and costs.
Last month, existing home sales rose 6.5 percent, reaching an annual rate of 5.39 million units, according to the National Association of Realtors (NAR).
Lawrence Yun, NAR chief economist, said that due to mortgage interest rates reaching the highest levels in two years, some buyers are being pushed to the sidelines.
The increase in home sales signifies that the jumps were manageable and are a positive reflection of the stabilizing economy, according to Donald Frommeyer, president of the National Association of Mortgage Brokers (NAMB).
Beyond the added cost resulting from rising mortgage interest rates, the average cost of a home has increased significantly. The national median price for existing homes of all various types was $213,500, a 13.7 percent increase since last year.
Despite the overall increase in cost of being a homeowner, one expert does not think the recent interest rate changes will have a significant impact on the market.
Phil Georgiades, chief loan steward for Va Home Loan Centers, said the increases will not impact the average customer.
“For the average home buyer, the increase in rates will increase their payment by less than $100,” he said. “If the interest rates double, then we can probably expect to see a substantial drop in prices as many buyers will exceed their threshold for affordability.”