Current 30 Year Mortgage Rates Still Low at 3.50 Percent but Will Increase in 2013

The Federal Reserve's multi-year campaign to revive the housing market by forcing mortgage rates down to record lows has finally started actually helping the housing market to recover. The Federal Reserve's policies created a refinance boom over the past three years as homeowners took advantage of low refinance rates. Many homeowners refinanced more than once the past two years as rates kept falling.

Current 30 Year Mortgage Rates Still Low at 350 Percent but Will Increase in 2013In 2013, a slew of housing reports have been released showing higher home prices, lower home inventory for sale, higher builder sentiment, and a growing optimism about housing again. The highest home affordability in a generation combined with the lowest mortgage rates in 65 years has made these times the best time to buy a home.

Home prices are moving higher in 2013 and mortgage rates will also move higher due to a stronger economy. Another factor that will send mortgage rates higher is the Federal Reserve ending their purchases of mortgage-backed securities and U.S. Treasuries.

The Federal Reserve has been buying these assets to drive long term rates lower. While rates will move higher in 2013 they will still stay low, historically speaking. We expect 30 year conforming rates to remain below 4.00 percent.

Houses are starting to sell quicker in many areas of the country. Shannon Drury, a real estate agent with Prudential Connecticut Real Estate, said, "Housing inventory is low and homes that are priced right are selling quickly." Another factor contributing to higher selling prices is the drag on home prices from short sales and foreclosures is abating because of fewer distressed properties on the market.

Mortgage rates today on 30 year conforming loans are averaging 3.70 percent but you can find dozens of lenders quoting 30 year conforming rates below the average. Depending on the state you live in, many lenders in our database are quoting 30 year refinance rates as low as 3.125 percent with points. Without points, we have lenders quoting rates as low as 3.375 percent.

15 year conventional mortgage rates are averaging 2.92 percent, up from last week's average mortgage rate of 2.84 percent. Average 15 year rates are almost back near 3.00 percent but there are lenders quoting 15 year rates just above 2.00 percent. Depending on the state you check for rates, we have lenders in our database quoting 15 year rates as low as 2.25 percent with points. Without points the lowest rates quoted are around 2.50 percent.

Average jumbo mortgage rates on 30 year and 15 year mortgages are also higher this week over last. 30 year jumbo mortgage rates are averaging 4.20 percent, up from last week's average jumbo mortgage rate of 4.06 percent. 15 year jumbo rates are averaging 3.46 percent, up from the prior week's average jumbo rate of 3.34 percent.

The lowest 30 year jumbo refinance rates quoted by lenders in our database are at 3.50 percent with points. The lowest 30 year jumbo rates without points are quoted at 3.625 percent. The best 15 year jumbo rates are at 2.75 percent with points and the best 15 year rates without points are quoted at 3.00 percent.

Author: Brian McKay
March 12th, 2013

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