Here's a summer cooling trend making things more comfortable for homebuyers: Mortgage rates are down for the fourth week in a row.
While rising home prices have been a buzzkill for buyers, low mortgage rates offer an incentive to go house-hunting now.
Existing homeowners might consider refinancing to score a lower rate. And you may want to act soon; industry analysts expect interest rates to go up later this year.
Pending sales show signs of life
With for-sale homes in relatively short supply this summer, the Mortgage Bankers Association says mortgage applications fell 2.8 percent last week.
At the same time, there's some evidence homebuyers are not content to let the right home slip through their fingers.
A measure of signed buyer contracts edged up 1.5 percent in June from an upwardly revised reading for May, according to the National Association of Realtors.
Compared to a year earlier, the NAR's Pending Home Sales Index was up 0.5 percent in June – the first year-over-year increase in a few months.
Rising home prices won't subside in 2018
The pending-home sales data is a good sign buyers are taking advantage of mortgage bargains. That said, as their options continue to dwindle, homes are becoming less and less affordable.
U.S. home prices rose 6.7 percent year over year from June 2016 to June 2017, data analytics firm CoreLogic reported.
If you were hoping that home prices would come down to earth a bit, you'll be waiting a while. CoreLogic predicts home prices will increase more than 5 percent over the coming year.
"The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory," says Frank Nothaft, CoreLogic chief economist.
Mortgage rates retreat again
The benchmark 30-year fixed-rate mortgage fell this week to 4.04 percent from 4.09 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 3.56 percent. Four weeks ago, the rate was 4.16 percent. The 30-year fixed-rate average for this week is 0.40 percentage points below the 52-week high of 4.44 percent, and is 0.50 percentage points higher than the 52-week low of 3.54 percent.
The 30-year fixed mortgages in this week's survey had an average total of 0.26 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.04 percent. This week's rate is 0.00 percentage points the same as the 52-week average.
- The 15-year fixed-rate mortgage fell to 3.28 percent from 3.31 percent.
- The 5/1 adjustable-rate mortgage fell to 3.48 percent from 3.50 percent.
- The 30-year fixed-rate jumbo mortgage fell to 4.05 percent from 4.08 percent.
At the current 30-year fixed rate, you'll pay $479.72 each month for every $100,000 you borrow, down from $482.62 last week.
At the current 15-year fixed rate, you'll pay $704.13 each month for every $100,000 you borrow, down from $705.59 last week.
At the current 5/1 ARM rate, you'll pay $447.93 each month for every $100,000 you borrow, down from $449.04 last week.
Weekly national mortgage survey
|This week's rate:||4.04%||3.28%||3.48%|
|Change from last week:||-0.05||-0.03||-0.02|
|Change from last week:||-$4.78||-$2.41||-$1.84|