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Average mortgage rates have dropped

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Posted: Friday, January 31, 2014 7:18 am

Mortgage buyer Freddie Mac says the average for the 30-year loan declined to 4.39 percent from 4.41 percent last week. The average for the 15-year loan eased to 3.44 percent from 3.45 percent.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. The Fed determined last month that the economy was strong enough to start trimming the purchases, which have kept long-term interest rates low.

The rise in mortgage rates and higher home prices slowed sales of existing homes, which have fallen for three straight months.

But overall, 2013, was the best year for housing in seven years. The National Association of Realtors reported Thursday that sales of existing homes edged up slightly in December, helping lift sales for the year to the highest level since 2006.

Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast sales and prices will likely rise around 5 percent, down from double-digit gains in 2013.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to calculate average mortgage rates. Extra fees, known as points, which most borrowers must pay to get the lowest rates are not included in the average. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also remained at 0.7 point. The average rate on a one-year adjustable-rate mortgage declined to 2.54 percent from 2.56 percent. The fee was unchanged at 0.5 point. The average rate on a five-year adjustable mortgage increased to 3.15 percent from 3.10 percent. The fee was steady at 0.5 point.

With the amazingly low interest rates and lack of inventory if you are interested in selling you should consult a Realtor today.

Eileen Schamber is the president of the Lodi Association of Realtors and can be reached at president@yourlocalaor.com