Home prices in Denver increased by double digits as the rest of the country experienced rising mortgage rates.
The Associated Press reports that average long-term mortgage rates have reached new heights for this year. On July 2nd, mortgage powerhouse Freddie Mac reported the national average interest rate for 30-year fixed-rate mortgages was 4.08%, increasing 0.06% from the previous week. The average interest rate for 15-year fixed rate mortgages was 3.24%, up from 3.21% the week before it.
Though the economy shows general signs of improvement in certain sectors, mortgage rates have steadily risen over the past few weeks. This is less than welcome news for prospective home buyers during the spring and summer home buying season.
The rates, however, are an improvement over last year’s mortgage rates. One year ago, the average 30-year rate was 4.12% and the 15-year rate was 3.22%.
In terms of housing prices, Denver and San Francisco lead the nation with double-digit gains since April. In addition, since April the Standard and Poor’s/Case-Shiller 20-City home price index (HPI) grew by 4.9% since April of 2014. Increases in job growth and relatively low mortgage rates have lead to greater demands in housing. As a result, home values have went up.
No matter what the rates are, it is recommended that borrowers have a credit score of at least 680 (or 620 for federally assisted housing) in order to get the best mortgage deal.
The average rates as calculated by Freddie Mac are based on surveys the company sends to lenders across the country at the beginning of every week. However, the average rates do not include “points,” extra fees borrowers must spend in order to lock in the lowest rates. One point, generally, is equivalent to 1% of the total loan amount.
The average fee for 30-year mortgages have decreased from 0.7 points last week to 0.6 points. For 15-year mortgages, the fee remains at 0.6 points.
In terms of five-year adjustable-rate mortgages (ARM), the average rate stands at 2.99% with the average fee at 0.4 points. The average rate for one-year ARM stands at 2.52% with the average fee at 0.3 points.