Illinois Mortgage Rates Climbing during Summer 2013
With the economy recovering and the housing market gaining strength, mortgage rates continue to climb and have crossed 4% (with -0- points) over the last few days. For the fifth straight week mortgage rates have climbed. Freddie Mac's weekly Primary Mortgage Market Survey showing the average 30-year fixed rate mortgage rate for conventional home loans at 3.91% with 0.7% in points and fees.
After the Bureau of Labor Statistics released its May jobs report there was a large mortgage bond sell off which lead to increase of bond yields and mortgage rates. Post release mortgage bonds sank 75 basis points which resulted in an increase of .250 percentage points. In a span of five weeks, mortgage rates have gone up by more than .5%.
As we look toward the future there are a few possibilities that could lower mortgage rates. Besides something drastic taking place in the world such as a failure of the Euro or Greece’s failure to pay its debts, the Fed’s mortgage bond purchase program, which is part of QE3, increases the demand for mortgage backed securities which helps suppress mortgage rates. However, the days of the 3.50% 30 year fixed rate may be over.
If you are looking to purchase a home, now may be the time to do so. Although mortgage rates have increased, they are still fairly close to historic lows. Keep in mind that 30 year fixed mortgage interest rates were higher than 6.0% as little as five years ago. When rates go back up to 6.0%, home ownership will once again be out of reach for many families.