Rising Home Prices Lift 2.5 Million Homeowners out of Negative Equity
Low mortgage rates are bringing home buyers back to the market and sending home prices higher. As home prices rise, more and more homeowners rise above water on their mortgages. According to CoreLogic, in the second quarter of 2013, 2.5 million U.S. properties emerged from underwater or negative equity.
The number of homeowners above water is increasing. In the fourth quarter of 2012, only 200,000 more homeowners returned to positive equity, less then one tenth the number in the second quarter of this year. The total number of residential properties with a mortgage with equity stands at 41.5 million.
7.1 Million Homeowners Still Under Water on Their Mortgage
This news is very positive for the residential real estate market and the economy but there are still 7.1 million homeowners, 14.5 percent of all residential properties, underwater on their mortgage. These homeowners can't sell their homes if they want to nor are they able to take advantage of record low refinance rates to refinance their loan.
30 Year Refinance Rates Hit a Record Low in 2013
30 year conforming refinance rates fell to as low as 3.27 percent on average earlier this year. Current 30 year refinance rates are higher, averaging 4.16 percent, but are still down from the high of 4.81 percent this year. One recommendation we can make is if your current mortgage rate is 5.00 percent or higher, you should refinance your loan.
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Even if you tried to refinance your mortgage over the past year and weren't able to, you should try again. Since home prices have risen in the low double digits over the past 12 months, you might now have enough equity to refinance. Prices in some markets that were hit hard during the housing bubble are bouncing back sharply. Some areas in Arizona, Nevada, California, and Florida have seen prices going up 20 percent or more.
Mortgage Rates Fall to Four Month Lows
Over the summer, average mortgage rates on conforming and jumbo loans shot up over 100 basis points on fears the Federal Reserve would taper their stimulus measures. The Fed didn't stop their stimulus programs and mortgage rates started falling again. Just this past week, Freddie Mac reported mortgage rates falling to four month lows.
Average 30 year mortgage rates for the week ending October 24, 2013, fell to 4.13 percent with 0.8 mortgage points. The average 30 year mortgage rate is down from the prior week's average of 4.28 percent. Freddie Mac's rate is an average rate, currently there are lenders in our rate database quoting 30 year rates as low as 3.75 percent with points.
15 year mortgage rates also fell week over week in Freddie Mac's report. Average 15 year mortgage rates fell to 3.24 percent with 0.6 mortgage points, down from the prior week's average 15 year mortgage rate of 3.33 percent. Right now on our rate tables the best mortgage rates on 15 year loans are at 2.625 percent with points.
Jumbo Mortgage Rates Today
Average 30 year jumbo mortgage rates today are at 4.39 percent, a decline from the prior week's average 30 year jumbo mortgage rate of 4.42 percent. 30 year jumbo rates moved above 5.00 percent during the summer on fears the Federal Reserve would stop buying mortgage-backed securities and long term U.S. bonds.
Since the Fed hasn't announced an end to their purchases and now look to continue their purchases well into 2014, average jumbo mortgage rates have fallen. For the rest of 2013 it appears 30 year jumbo rates will remain below 4.50 percent and possibly fall back to the 4.00 percent level.
Right now on our rate tables, we have one lender quoting 30 year jumbo loan rates at 4.00 percent with points. We also have many lenders quoting 30 year jumbo rates at 4.125 percent and the lowest jumbo rate without points is quoted at 4.25 percent.
Current mortgage rates on 15 year jumbo loans are currently averaging 3.78 percent, down from the prior week's average 15 year jumbo mortgage rate of 3.80 percent. For the remainder of the year, 15 year jumbo rates will stay under 4.00 percent and might fall as low as 3.50 percent.
Currently, the lowest 15 year jumbo refinance rates in our database are much lower than the average rate. The lowest rate with mortgage points is at 3.125 percent from Pentagon Federal Credit Union. The lowest 15 year jumbo refinance rate without points is at 3.375 percent.
RatesORama.com Average Mortgage Rates