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Mortgage News

Ready to refi? Mortgage rates sink to their lowest since October

January 29th, 2016 1:09 PM by Chris Styner

By Crissinda Ponder

Interest rates on mortgages fell for the 4th consecutive week as economic worries maintain a stronghold over international markets.

And, as expected, the Federal Reserve's policy-setting committee refrained from further raising the federal funds rate. Concerns were raised about the broader economy, including falling oil prices, however.

"The committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook," a statement from the committee reads.

Home price increases continue

National home prices ticked up 0.9% on a seasonally adjusted basis from October to November 2015, according to the S&P/Case-Shiller home-price index released Tuesday. Year over year, prices increased 5.3% from November 2014.

Denver, San Francisco and Portland, Oregon, were the only 3 cities in the 20-city composite that saw year-over-year double-digit price gains.

"Basically, the housing market, as measured by prices, is in good shape and the more prices rise, the more homeowners have the equity to make a move," Joel Naroff, president and chief economist for Naroff Economic Advisors in Holland, Pennsylvania, says in a blog post. "That is good news."

Separate data from the Federal Housing Finance Agency show that home prices rose 0.5% from October to November on a seasonally adjusted basis, and were up 5.9% from the same month in 2014.

A look at this week's rates

  1. The benchmark 30-year fixed-rate mortgage fell to 3.94% from 3.98%, according to a Jan. 27 survey of large lenders. A year ago, the rate was 3.8%. Four weeks ago, it was 4.15%. The mortgages in this week's survey had an average total of 0.21 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.01%. This week's rate is 0.07 percentage points lower than the 52-week average.

  2. The benchmark 15-year fixed-rate mortgage fell to 3.21% from 3.23%.

  3. The benchmark 30-year fixed-rate jumbo mortgage fell to 3.83% from 3.87%.

  4. The benchmark 5/1 adjustable-rate mortgage fell to 3.3% from 3.31%.

    Ready for a refi?

    Mortgage applications jumped 8.8% last week compared with the week before, according to data from the Mortgage Bankers Association's weekly survey. The unadjusted purchase index inched up 0.4% and was 22% higher than the same week last year. MBA's survey includes an adjustment for Martin Luther King Jr. Day.

    To the delight of borrowers, mortgage rates have improved overall since the Fed's initial rate hike at its December meeting, says Brett Sinnott, vice president of capital markets for CMG Financial in San Ramon, California. This is especially true for those interested in refinancing.

    "They've gone back to levels that are close to early 2015 at this point," he says. "Any borrower that was going to miss the train for a refinance got lucky and a 2nd train came through."

    New home sales surge

    New, single-family home sales increased 10.8% from November to December, the U.S. Census Bureau and the Department of Housing and Urban Development said Wednesday. The seasonally adjusted annual rate was 544,000, which is 9.9% above the December 2014 rate.

    Both the median and average sales prices declined last month, from $302,000 to $288,900 and from $373,500 to $346,400, respectively. The estimated total of new homes sold in 2015 is 501,000 -- the highest number of sales since 2007.

    Now is a great time to enter the housing market, says Jeff DerGurahian, executive vice president of capital markets at LoanDepot in Foothill Ranch, California.

    "With rates still hovering at 4%, affordability is still in a good spot," he says.


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