Mortgage Rates Inch a Bit Higher this Week

After four weeks of declines, the average rate for a 30-year, fixed-rate mortgage rose to 6.12% from last week’s 6.09%. It may suggest some short-term stability. McLEAN, Va. – The average long-term U.S. mortgage rate ticked up slightly this week after four weeks of declines, a possible sign of stability that could draw in home shoppers with spring buying season weeks away. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched up to 6.12% this week from 6.09% last week. The average rate a year ago was 3.69%. The average long-term rate reached a two-decade high of 7.08% in the fall as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and bring down stubborn, four-decade high inflation. At its first meeting of 2023 last week, the Fed raised its benchmark lending rate by a quarter point, its eighth increase in less than a year. That pushed the central bank’s key rate to a range of 4.5% to 4.75%, its highest level in 15 years. While acknowledging that some measures of inflation have eased, Fed Chair Jerome Powell appeared to suggest last week that he foresees two additional quarter-point rate hikes this year. Though those rate hikes do impact borrowing rates across the board for businesses and families, rates on 30-year mortgages usually track the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with interest rates can also influence the cost of borrowing for a home. The big rise in mortgage rates during the past year has devastated the housing market, with sales of existing homes falling for 11 straight months to the lowest level in more than a decade. Higher rates can add hundreds of a dollars a month in costs for homebuyers, on top of already high home prices. The National Association of Realtors reported earlier this month that existing U.S. home sales totaled 5.03 million last year, a 17.8% decline from 2021. That is the weakest year for home sales since 2014 and the biggest annual decline since 2008, during the housing crisis of the late 2000s. The rate for a 15-year mortgage, popular with those refinancing their homes, rose this week to 5.25% from 5.14% last week. It was 2.93% one year ago. Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Conventional Loan Limit

2023’s New Conventional Loan Limit: $726,200 By Kerry Smith FHFA announced new conforming loan limits for 2023, and most buyers can borrow up to $726.2K without a jumbo loan – and it’s over $1M in some areas. WASHINGTON – Fannie Mae and Freddie Mac – which back a majority of U.S. home loans – have a new lending cap in 2023. The Federal Housing Finance Agency (FHFA) announced that the conforming loan limit values (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023 will go up $79,000 to $726,200 in most areas of the U.S for one-unit properties. The cap in those areas this year is $647,200. The cap varies by county, however. FHFA says two U.S. counties will have a lower cap, and additional areas will have a higher cap that, in 2023, will rise about $1 million for the first time – up to $1,089,300 for one-unit properties. FHFA says about 3.3% of counties – 100 out of more than 3,000 – are considered high-cost markets. In Florida, the higher conforming cap largely applies only for some Monroe County residents. The higher cap applies in areas where 115% of the local median-home value exceeds the baseline conforming loan limit. The Housing and Economic Recovery Act (HERA) of 2008 includes a calculation to create a higher cap in those areas. In addition, special statutory provisions create different loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will also be $1,089,300 for one-unit properties. HERA is a yearly adjustment to conforming loan limits. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 12.21%, on average, between the third quarters of 2021 and 2022. As a result, 2023’s baseline conforming loan limit will increase by the same percentage.​