Did Low Current Mortgage Rates Drive Toll Bros Contract Signings Higher?

Historically speaking, current mortgage rates are near record lows. Could these low mortgage rates drive Toll Brothers sales contracts higher?

Probably so, along with the housing price declines we have seen over the past three years and the $8,000 tax credit for first time home-buyers. Toll Brothers, a high end home building company that has been around for over 40 years reported an increase in home buyers signing contacts to buy homes.

Three percent more homebuyers signed contracts in their fiscal third quarter. Although a three percent increase isn’t much of an increase, the big deal is this is the first annual increase in four years!

Home builders have had a hard time over the past several years. I bet they are jumping for joy with all the recent positive data on the housing market. Even more positive is quarter over quarter signed contracts increased 44 percent.

Current mortgage rates have been hovering in a tight range of 5.00 percent to 5.50 percent over the past month, for a 30-year mortgage. Today’s mortgage rates aren’t much higher than the low rates set in mid May of this year. 

Mortgage rates currently are estimated to go higher as the year goes on. 15-year mortgage rates can still be found for under 5.00 percent, the national average mortgage rate on a 15-year is at 4.81 percent today.  

Jumbo rate mortgages also haven’t changed much over the past month. Jumbo mortgage rates are higher than conventional mortgage rates by a range of three quarters to one percent higher.