Low Housing Inventory Sparks Bidding Wars Thanks to Low Mortgage Rates
mortgage rates drive demand for homes. Home inventory levels fell to an 11 year low in 2012 and fell again in January 2013. Homes available for sale declined 16.5 percent in January year-over-year, after falling 5.6 percent from December 2012, according to the latest housing data compiled from Realtor.com.
Mortgage rates today on both conforming and jumbo loans are just above record lows set last last year. The housing market has finally turned the corner and is healthy again, contributing to GDP growth and leading the economy again. Current mortgage rates on 30 year conforming loans are averaging 3.66 percent, an increase from last week's average 30 year mortgage rate of 3.57 percent.
Mortgage interest rates have moved higher the past few months but are still just above record lows. We can thank the Federal Reserve for the lowest mortgage rates in a generation. Rates might move slightly higher in 2013 but not by much and 30 year mortgage rates on average will remain below 4.00 percent for conforming loans.
30 year jumbo mortgage rates currently are at 4.12 percent, higher than last week's average jumbo rate of 4.02 percent. In 2013, average jumbo interest rates will also move higher but remain under 4.50 percent. The average rates we report on are just averages and you can find lenders quoting mortgage refinance rates below the averages.
Today's mortgage rates on 15 year conventional home loans are averaging 2.92 percent, up from last week's average 15 year mortgage rate of 2.85 percent. Average 15 year mortgage interest rates will go as high as 3.25 percent in 2013, provided the economy doesn't fall into a recession. Right now you can find lenders quoting 15 year refinance rates as low as 2.25 percent with points.
Mortgage rates currently on 15 year jumbo loans are averaging 3.48 percent, up from last week's average 15 year jumbo rate of 3.35 percent. During 2013, we could possibly see 15 year jumbo rates move as high as 3.75 percent but right now you can find lenders quoting 15 year jumbo refinance rates as low as 3.00 percent with points.
There are many advantages to getting a 15 year loan instead of a 30 year loan. The biggest advantages are that you own your home in half the time and save hundreds of thousands of dollars in interest payments. The only negative is your monthly mortgage loan payments will be somewhat higher with a 15 year loan instead of a 30 year loan. If the increase is something you can swing, it's definitely worth it in the long run.
RatesORama.com Average Mortgage Rates