Mortgage rates are up just slightly today, moving higher for a second day in a row. Stock markets around the world rebounded from recent losses yesterday and the price of oil rose to near $50, so the bond market saw little change. The benchmark for mortgage pricing, the 10-year Treasury, also held steady.
Mortgage Rates: May 24, 2016 (Change from 5/24)
30-year fixed: 3.82% (+0.02)
15-year fixed: 3.17% (+0.03)
5/1 ARM: 3.47% (+0.03)
Meanwhile, U.S. new home sales saw their biggest gains in 24 years in April — up nearly 24% over last year, according to the Commerce Department.
“At last we have a clear, statistically significant view that the new home market is having its best spring buying season in a decade,” Jonathan Smoke, chief economist for Realtor.com, says. “It appears that the growth in sales is coming from higher price points, indicating that builders are finding success with move-up, luxury, and active adult home buyers rather than entry level buyers. Hopefully this will free up existing home owners to sell their lower priced homes as they move up.”
New home prices also rose to record highs.
While rates are still favorable, home inventory is not. Considering new and existing homes, there are 3.4% fewer homes for sale in the U.S. — and nearly 8% fewer entry-level homes — than a year ago, according to Zillow.
“New construction has been sluggish over the past year; we’re building about half as many homes as we should be in a normal market,” Dr. Svenja Gudell, Zillow chief economist, says. “In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price.”
Rates shown are an average of the lowest advertised 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 expect to pay. Fees, points and expenses vary by lender and loan type.