The benchmark average 30-year fixed mortgage rate held steady at 5.10 percent this week, maintaining its highest level since February 2011, according to Bankrate.com’s survey of the nation’s largest mortgage lenders. The average 15-year fixed rate inched up one basis point to 4.47 percent and the average 5/1 adjustable mortgage rate jumped three basis points to 4.48 percent.
Although rates didn’t budge after many weeks of increases, more homebuyers are hitting the pause button on their plans. Here’s a look at news impacting housing this week.
Mortgage applications have been pummeled by higher rates. Total mortgage applications sunk by 3.2 percent from the previous week as interest rates hit eight-year highs, according to the Mortgage Bankers Association’s weekly survey for the week ending Nov. 9.
Purchase applications dipped 2.3 percent to the lowest level since February 2017. Meanwhile, the unadjusted index for refinance applications fell 4.3 percent from the previous week, reaching the lowest level since December 2000.
Rising rates, coupled with recent stock market volatility, continue to stifle homebuyers’ aspirations despite a robust economy, says Joel Kan, associate vice president of economic and industry forecasting with the MBA.
Record-high equity. Nearly 14.5 million U.S. homes were “equity rich,” or worth more than twice the loans that secure them, as of third-quarter 2018, according to a new report from ATTOM Data Solutions. A home is considered “equity rich” if all the combined estimated debts that are secured by the property equal 50 percent or less of its estimated market value.
“The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage, up from 24.9 percent in the previous quarter but down from 26.4 percent in Q3 2017,” according to the report.
While equity gains benefit home sellers or those looking to tap their home’s equity, it’s another barrier for potential buyers who’ve seen little relief from steeper home prices (and higher rates).
Meanwhile, more than 4.9 million U.S. properties were seriously underwater, representing 8.8 percent of all U.S. properties with a mortgage, ATTOM’s research found. A property becomes “underwater” when the loan balances that secure it are at least 25 percent higher than its estimated market value. Although the 8.8 percent share of underwater properties is down from 9.3 percent in the previous quarter, it’s up slightly from 8.7 percent a year ago.
“As homeowners stay put longer, they continue to build more equity in their homes despite the recent slowing in rates of home-price appreciation,” said Daren Blomquist, senior vice president with ATTOM Data Solutions, in a statement. “West Coast markets, along with New York, have the highest share of equity rich homeowners while markets in the Mississippi Valley and Rust Belt continue to have stubbornly high rates of seriously underwater homeowners when it comes to home equity.”
Homebuying sentiment wavering. Consumers have a dimmer view of the housing market. The Fannie Mae Home Purchase Sentiment Index fell 2 points to 85.7 in October, continuing a recent spiral. Fannie Mae measured drops in five of the six index components, including those measuring consumers’ home buying and selling attitudes.
The net share of Americans who said it was a good time to buy a home tumbled 5 percentage points. Meanwhile, the net share who said it’s a good time to sell a home fell 3 percentage points.
While the net share of survey respondents who expect home prices to increase fell 2 percentage points, the net share of those who expect mortgage rates to go down fell 1 percentage point. Plus, there’s a little more pessimism about job security, with the net share of respondents who are confident about not losing their job dipping by 1 percentage point, Fannie Mae reported.
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage stayed flat at 5.10 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.09 percent. Four weeks ago, the rate was 5.01 percent. The 30-year fixed-rate average for this week matches the 52-week high of 5.10 percent, and is 1.06 percentage points higher than the 52-week low of 4.04 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.33 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.61 percent. This week’s rate is 0.49 percentage points higher than the 52-week average.
- The 15-year fixed-rate mortgage rose to 4.47 percent from 4.46 percent.
- The 5/1 adjustable-rate mortgage rose to 4.48 percent from 4.45 percent.
- The 30-year fixed-rate jumbo mortgage rose to 4.98 percent from 4.97 percent.
At the current 30-year fixed rate, you’ll pay $542.95 each month for every $100,000 you borrow, unchanged from last week..
At the current 15-year fixed rate, you’ll pay $763.46 each month for every $100,000 you borrow, up from $762.95 last week.
At the current 5/1 ARM rate, you’ll pay $505.50 each month for every $100,000 you borrow, up from $503.72 last week.
Results of Bankrate.com’s weekly national survey of large lenders conducted November 14, 2018 and the effect on monthly payments for a $165,000 loan:
| Breakdown | 30-year fixed | 15-year fixed | 5-year ARM |
|---|---|---|---|
| This week’s rate: | 5.10% | 4.47% | 4.48% |
| Change from last week: | N/C | +0.01 | +0.03 |
| Monthly payment: | $895.87 | $1,259.71 | $834.07 |
| Change from last week: | N/C | +$0.84 | +$2.93 |
The “Bankrate.com National Average,” or “national survey of large lenders,” is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison.
