Mortgage Rates Mixed Friday While Home Sales Soar at Record Pace

Finding the Right Mortgage, Mortgages
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mortgage rates

With the Fed out of the news until next month, lenders are adjusting their rate sheets without distraction. Most made little, if any, changes to their terms Friday but the repricing initiated was mixed — some higher, others lower. As a result, there is no clear direction for mortgage rates today.

The lack of major movement means interest rates are still holding to three-year lows and that’s fueling an active real estate market. In fact, a new report says U.S. housing recorded its fastest sales pace on record in May.

The typical home sale went under contract in 42 days last month — the fastest pace on record and a week faster than one year ago, according to real estate brokerage Redfin.

“After almost a decade of undersupplied housing stock, competition is fierce,” said Redfin chief economist Nela Richardson. “What’s new in 2016 is that we’re seeing the intensity of fast sales and bidding wars even in affordable markets like Grand Rapids and Omaha, where the typical home sold within two weeks last month.”

Meanwhile, a NerdWallet lender survey Friday reveals average mortgage rates for the most popular loan terms. NerdWallet compiles lender interest rates plus fees (APR) — the most accurate way for consumers to compare rates:

Mortgage Rates: June 17, 2016

(Change from 6/16)

30-year fixed: 3.69% APR (+0.01)

15-year fixed: 3.05% APR (NC)

5/1 ARM: 3.31% APR (-0.01)

Redfin also reports home prices increased year-over-year 4.3% in May, while sales rose by 7%.

“Move-up buyers have specifically noted they are buying now to take advantage of still-low mortgage rates,” William Porterfield, a Redfin agent in Little Rock, said in a release. Sales in the Arkansas city have increased 33% from a year ago. “They’re focused on buying as much house as possible while interest rates are so low.”

Lock or float your mortgage rate?

Barring a global economic surprise, such as Britain voting to leave the European Union in next week’s referendum, economists generally believe mortgage rates will remain low in the near term.

As always, any decision to lock a mortgage rate should be based on the borrowers’ risk tolerance and their short- and long-term goals.

NerdWallet daily mortgage rates are an average of the lowest published APR for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing a more accurate view of the costs a borrower might pay.

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Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.