Bay Area Weekly Interest Rate Update- Pricing Up, trend to lock

According to Freddie Mac, the 30-year fixed mortgage rate jumped to an average 5.32% this week, from 4.91% last week. While refinancing activity has been hit by the rising rate, home purchases continue to rise. It looks as though home buyers are jumping in now, in case the rates rise further. Diane Saatchi, senior vice president with the Corcoran Group, says, “In the short run, there’s an increase in activity to lock in rates. We’re seeing a bit of a frenzy to buy.” A further rise in rates could slow housing recovery, but the current rates are not high enough to dampen home buyers’ interest. Greg McBride, senior analyst at bankrate.com, says the recent rise in rates is not a “barrier to affordability,” and home buyers “don’t need to panic,” as yet. “Down payments and the ability to sell existing homes are the main impediment for home buyers now,” said McBride. “There’s also the more stringent underwriting rules. If you can get past those, mortgage rates are not a problem.” It is important for home buyers not to lose sight of what they are trying to achieve when they shop around for the best rates and prices. “Don’t get caught in the trappings of the negotiations and lose the whole package,” says Saatchi. “People want a great deal and they forget about the house they’re trying to buy.”

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