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Mortgage Rates Today, Jan. 27: Little Change; A 15-Mile Drive to Affordability?

Jan. 27, 2017
Mortgage Rates, Mortgages
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Thirty-year fixed rates were up a couple of ticks and 15-year fixed rates were unchanged, while 5/1 ARM rates fell a notch Friday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

“Mortgage rates hit 2017 highs this week, as the new administration’s plans grew clearer, stocks rallied and Fed members stressed further rate hikes,” Ted Rood, a senior loan officer in St. Louis, told NerdWallet via email. “Bond markets are still digesting election results, and the multiyear trend to lower rates is comatose, if not deceased.”

Rood says it may be time for home buyers to lock in their mortgage rate.

“I’m advising clients to lock their loans early, or be prepared for higher rates by closing. Floating here involves a far greater risk than the potential reward,” he adds.

Mortgage Rates Today,
Friday, Jan. 27

(Change from 1/26)
30-year fixed: 4.48% APR (+0.02)
15-year fixed: 3.85% APR (NC)
5/1 ARM: 3.84% APR (-0.01)

A 15-mile drive to affordability

A real estate agent axiom may apply here: “Drive until you qualify.” While some of the most expensive housing markets continue to confound buyers, new research from Zillow finds that affordable homes may be as little as a 15-mile drive away.

Small cities next door to housing hot spots can offer relief from high prices, the report says. For example, home buyers in Palo Alto, California, can expect to spend 75.4% of their income on a house payment. But 15 miles away, in Milpitas, California — the “place of little cornfields” — they would need to budget only 34.8% for housing.

>> MORE: Calculate your monthly mortgage payment

“The Bay Area and other expensive West Coast markets get a lot of attention for being unaffordable, but even they have some areas where the share of income spent on housing is relatively low,” Svenja Gudell, Zillow chief economist, said in a release. “Of course, buyers have to be willing to make some trade-offs to live in more affordable cities within the metro.”

Zillow says the trade-offs can include “fewer amenities or longer commutes.”

In the New York metro, home buyers in Passaic, New Jersey, can expect to spend 45.7% of their income on housing, while Brentwood, New York, residents would shell out only 14.7% of their budget for a home.

Zillow examined 35 metropolitan areas in the U.S., finding cities with the smallest and the greatest mortgage burden in each metro.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most 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: [email protected]. Twitter: @halmbundrick.