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Mortgage Rates Today, Sept. 1: Uptick, Housing Inequality Widens

Sept. 1, 2016
Mortgage Rates, Mortgages
Mortgage Rates Today, Thursday, Dec. 1: Continuing to Climb
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Thirty-year, 15-year and 5/1 ARM mortgage rates all rose on Thursday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

The increases, though slight, might mean we’ll see rates heading north from now on. It could be that the honeymoon for rock-bottom mortgage rates is finally over.

Housing inequality gap widens even more

Inequality isn’t just a gender pay or race issue. It’s also glaringly obvious within the U.S. housing market. Over the past 30 years, prices in the 20 priciest housing markets have risen more quickly than prices in the 20 least expensive, according to new research from Trulia. Expensive markets (think San Francisco or Seattle) almost always had more significant price gains compared to less expensive markets like Dayton, Ohio, or Tulsa, Oklahoma.

And the gap has only grown. Trulia reported that the priciest metros were 144% more expensive than the least expensive metros in 1986, but that differential has grown to over 319% today.

The housing-wealth disparity becomes even more stark when looking at homeowners’ return on investment over 30 years. In Rochester, New York, and Wichita, Kansas, the returns have been 85% and 89.9%, respectively, while ROI in San Francisco and San Jose, California, has been a whopping 557.6% and 496.5%. In other words, a homeowner gets an average cash return of approximately $50,000 in Dayton, Ohio — lowest among the survey’s 100 largest metros — compared to nearly $900,000 in San Francisco.

“Both trends suggest that economic convergence — the idea that over time, less expensive markets should ‘catch up’ to more expensive ones — is not taking place,” wrote Trulia Chief Economist Ralph McLaughlin in a blog post titled “Rich City, Poor City: How Housing Supply Drives Regional Inequality.”

McLaughlin said much of the contrast between rich and poor cities (in terms of homeownership) comes down to two main elements: income growth and new housing construction.

The NerdWallet Mortgage Rate Index compiles annual percentage rates — lender interest rates plus fees, the most accurate way for consumers to compare rates. Here are today’s average rates for the most popular loan terms:

Mortgage Rates: Sept. 1, 2016

(Change from 8/31)

30-year fixed: 3.64% APR (+0.01)

15-year fixed: 3.07% APR (+0.01)

5/1 ARM: 3.54% APR (+0.02)

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

NerdWallet daily mortgage rates are an average of the published APR with the lowest points 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 the most accurate view of the costs a borrower might pay.

More from NerdWallet:
How much house can I really afford?
Compare mortgage rates
5 tips for finding the best mortgage lenders

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: [email protected]. Twitter: @debbie_kearns.