Mortgage Rate Predictions For August 2014 (FHA, VA, USDA & Conv)
Mortgage Rate Predictions For August 2014 (FHA, VA, USDA Conv)
- Mortgage Rates
Current mortgage rates continue to move lower.
According to Freddie Macs weekly mortgage rate survey of more than one hundred banks, the average 30-year mortgage rates dropped one basis points (0.01%) last week to reach 4.12%; and the average 15-year mortgage rates dropped three basis points (0.03%).
Mortgage interest rates are near a 14-month low. Home buyers have benefitted from low rates all year. Now, refinancing households are benefitting, too.
Click to get todays live mortgage rates.
30-Year Mortgage Rates Average 4.12%
30-year mortgage rates moved lower again last week. Nationwide, the average conforming 30-year fixed rate mortgage rate fell 0.01 percentage points to 4.12%. The rate is available to prime borrowers willing to pay an accompanying 0.6 discount points at closing.
Discount points are a one-time loan cost, where one discount point carries a cost equal to one percent of your first mortgage loan size amount.
For example, 1 discount point on a loan Miami, Florida at the 2014 conforming loan limit of $417,000 would require $4,170 to be paid at closing.
Discount points can be paid as cash or, for a mortgage refinance, they can be added to your loan size.
Discount points are typically tax-deductible.
15-year mortgage rates also dropped last week, shedding 0.03 percentage points to fall to 3.23% nationwide. Locking a 15-year mortgage rate at 3.23% costs 0.7 discount points on average.
Note that Freddie Macs weekly mortgage interest rate survey covers conforming loans only. FHA mortgage rates and VA mortgage rates are not included in the report; nor are mortgage rates for USDA loans.
Last week, however, similar to their conventional loan counterpart, mortgage rates for FHA, VA and USDA loans improved. Rates are now near 14-month lows and buyer purchasing power is up close to 8% from the start of the year.
Its an excellent time to compare todays mortgage rates. Pricing is as good as its been all year.
Click to get todays live rates now.
Mortgage Rates In August
Last month, mortgage rates were mostly unchanged. When July began, 30-year mortgage rates averaged 4.12%, and they averaged 4.12% when July ended.
On average, mortgage rates moved just 1.6 basis points per week throughout July, which marks the smallest weekly moves in more than five years. Rates were uncommonly stable last month, which made for simple shopping.
In August, the trend may end — todays market is wound tight like a coil and sits ready to spring.
There are a number of factors which could affect this months mortgage rates.
More Jobs In The Economy
Last week, the July Non-Farm Payrolls report showed 209,000 net new jobs added to the economy; plus, a 15,000 upward revision to the prior two releases. July marked the sixth straight month in which job growth topped 200,000 — the longest such streak since 1997.
Slowly and steadily, the jobs market is returning. This has implications beyond just the Unemployment Rate. As more workers are added to the economy, consumer spending tends to rise and inflation pressures often increase.
Furthermore, the Federal Reserve makes labor markets a focal point for future policy and stimulus. As the jobs market expands, expect the Fed to play a lesser role in holding todays mortgage rates down.
A Rise In Inflation Rates
The Federal Reserve also watches inflation rates. As inflation rates rise, the Fed is more inclined to remove its market stimulus, which can cause mortgage rates to rise. But, aside from the Fed and its policies, inflation is generally bad for low mortgage rates.
When inflation rates rise, mortgage rates do, too. This is because inflation devalues the US dollar which, in turn, devalues dollar-denominated US mortgage bonds. During periods of inflation, mortgage rates tend to rise.
Since 2012, inflation rates have been stable and low. Theres evidence, though, that inflation rates are climbing. GDP beat estimates; wage growth continues; and, everyday prices are rising. As inflation pressures build, mortgage rates are expected to rise.
Geopolitical Concerns
Tensions in the Gaza Strip; between Ukraine and Russian; and, in Africa each affect this months mortgage rates. In general, as nations move closer to war, US mortgage rates improve. This is the result of an investing pattern known as a flight-to-quality.
Flight-to-Quality describes, during periods of economic or political uncertainty, the flow of money from risky assets toward safe ones. Investors seek safe assets to protect their principal investments, and to shield against loss.
So, because mortgage bonds are among the safest investment classes in the world, 30-year mortgage rates tend to improve when war is imminent; or, when large global economies face an uncertain future.
This is another reason mortgage rates stayed low in July. In August, rates could begin rising.
Click for todays live mortgage rates.
This Weeks Economic Calendar
This week, there is very little on the US economic calendar to affect current mortgage rates. Therefore, expect for markets to move on politics and momentum.
The complete calendar is as follows:
- Monday : None
- Tuesday : Factory Orders; ISM Non-Manufacturing Index
- Wednesday : None
- Thursday : Jobless Claims; Consumer Credit
- Friday : Productivity and Costs
Note that there are no Federal Reserve members scheduled to speak this week; and, there are no Treasury auctions scheduled for the markets. Mortgage rates have very few outside influences to affect whether pricing will rise or fall.
During weeks such as this, be wary of momentum. Rates can change quickly, and without notice — especially with stock markets posting two weeks of losses. Wall Street is jittery and mortgage rates may suffer.
Its a good, safe time to lock a low rate. Todays mortgage rates may not last.
Get Todays Rate Quotes Here
Mortgage rates are near a 14-month low. Home buyers have their greatest purchasing power of the year; and refinancing households are saving more money.
Compare todays live mortgage rates and see what you can save. Free mortgage rates are available online with no social security number required to get started and no obligation to proceed.
Click for todays rates now.
