Housing Prices Continue to Rise Along with Mortgage Rates
Housing prices continue to rise as buyers compete for the low number of homes available for sale. Mortgage rates are also moving higher as 10 year bond yields soared yesterday on the highest consumer confidence in 5 years. At some point, higher mortgage rates will put a damper on home sales but we are several years away from that happening.
Home Prices Increase
The latest S&P/Case-Shiller home price index rose by 10.9 percent over the last year. Home prices rose in every one of the 20 cities tracked in the index, and this is the third consecutive month that prices have increased in all 20 cities tracked in the index. Homeowners are also feeling more confident about the future as the Consumer Confidence Index hit a 5 year high at 76.4 percent.
10 year bond yields which were under 2.00 percent last week have soared above and are now at 2.15 percent, which will force mortgage rates higher in the coming days. Rates are moving higher from record lows but historically speaking, rates are still at the lowest point in over a generation. Mortgage rates today on 30 year conforming loans are averaging 3.88 percent, an increase from last week's average 30 year rate of 3.65 percent.
Average 15 Year Mortgage Rates Soar
Average 15 year conforming mortgage interest rates are averaging 3.03 percent. This is the first time rates moved above 3.00 percent since late in May 2012 when the average 15 year rate was at 3.02 percent. The increase in average 15 year conforming rates was rather large since last week average 15 year rates were at 2.80 percent.
Current mortgage rates on jumbo loans have also soared the past week. Average 30 year jumbo mortgage rates are averaging 4.10 percent, an increase from last week's average 30 year jumbo mortgage rate of 3.99 percent. 15 year jumbo rates are averaging 3.55 percent, up from the prior week's average 15 year jumbo rate of 2.43 percent.
If you're looking to buy a home, now is probably going to be one of the best times ever. Although both housing prices and mortgage rates have increased this year, homes are still more affordable than they have been in a generation. Home prices are also forecasted to increase by the low double digits in 2013 and back to more historical price increases of around 1 percent above the inflation rate.
You can compare mortgage rates from lenders by using our rate tables here: monitorbankrates.com/mortgage-rates.
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