Mortgage industry insights

After 'Santa Claus rally,' mortgage rates rise a bit

The average rate on 30-year fixed mortgages rose to 6.96 percent this week, up from 6.9 percent last week, according to Bankrate's weekly national survey of large lenders.

Mortgage rates fell sharply in mid-December as the Federal Reserve wrapped up its final meeting of the year with no rate hike. The Fed signaled several rate cuts in 2024, and mortgage rates plunged from 7.21 percent to 6.88 percent in a single week.

However, mortgage rates ticked higher over the holidays, in part because the Fed is again talking about keeping rates higher for longer.

"It's not surprising to see markets give back some of the gains made during the Santa Claus rally," says Michael Becker, branch manager at Sierra Pacific Mortgage.

While the Fed doesn't directly set fixed mortgage rates, its monetary policies do influence their direction. A growing number of housing economists say mortgage rates could stay below 7 percent in the coming months. If you're shopping for a mortgage, keep in mind that 6.96 percent is just an average — some lenders advertise below-average rates on Bankrate.

Location plays a role, too. In some areas of the U.S., rates are below 6.75 percent.

Many homebuyers have been sidelined by higher rates, along with the ever-present issue of low inventory. Inflation, the economy and Fed policy will remain the main factors driving mortgage rates in the coming months.

Learn more: Weekly mortgage rate trend analysis

Current mortgage and refinance interest rates

• Purchase
• Refinance

Product	Interest Rate	APR
30-Year Fixed Rate	7.07%	7.09%
20-Year Fixed Rate	6.98%	7.00%
15-Year Fixed Rate	6.46%	6.49%
10-Year Fixed Rate	6.22%	6.24%
5-1 ARM	6.41%	7.65%
10-1 ARM	8.10%	7.88%
30-Year Fixed Rate FHA	6.09%	7.00%
30-Year Fixed Rate VA	6.29%	6.40%
30-Year Fixed Rate Jumbo	7.13%	7.14%

Rates as of Monday, January 08, 2024 at 6:30 AM

 

 

• How does the Federal Reserve impact today's mortgage rates?

• Interest rate vs. APR

• Why trust Bankrate's mortgage rates

How to get the best mortgage rate for you

Getting the best possible rate on your mortgage can mean a difference of hundreds of extra dollars in or out of your budget each month — not to mention thousands saved in interest over the life of the loan. You won't know what rates you qualify for, though, unless you comparison-shop. Here's how to do it:

1. Determine what type of mortgage is right for you. Consider your credit score and down payment, how long you plan to stay in the home, how much you can afford in monthly payments and whether you have the risk tolerance for a variable-rate loan versus a fixed-rate loan.
2. Compare mortgage rates. There's only one way to be sure you're getting the best available rate, and that's to shop at least three lenders, including large banks, credit unions and online lenders, or by using a mortgage broker. Bankrate offers a mortgage rates comparison tool to help you find the right rate from a variety of lenders. Keep in mind: Mortgage rates change daily, even hourly, based on market conditions, and vary by loan type and term.
3. Choose the best mortgage offer for you. Bankrate's mortgage calculator can help you estimate your monthly mortgage payment, which can be useful as you consider your budget. Look at the APR, not just the interest rate. The APR is the total cost of the loan, including the interest rate and other fees. These fees are part of your closing costs.

• How to get a mortgage: Step-by-step

Bankrate Insight

It's been proven: Shopping with multiple lenders can save you up to $1,200 a year. Bankrate's mortgage amortization calculator shows how even a 0.1 percent difference on your rate can translate to thousands of dollars you could pay over the life of the loan.

LENDER COMPARE

Compare mortgage lenders side by side

Mortgage rates and fees can vary widely across lenders. To help you find the right one for your needs, use this tool to compare lenders based on a variety of factors. Bankrate has reviewed and partners with these lenders, and the two lenders shown first have the highest combined Bankrate Score and customer ratings. You can use the drop downs to explore beyond these lenders and find the best option for you.

Lender

Garden State Home Loans

NMLS: 473163 

|

State License: MB-473163  

3.1

Rating: 3.1stars out of 5

Bankrate Score

• About the Lender

Recent Customer Reviews

Rating: 4.98 stars out of 5

5.0

562 reviews

• Joe is the man!

  Rating: 4.39 stars out of 5

• Outstanding experience

  Rating: 4.39 stars out of 5

Read full lender review

Lender

Homefinity

NMLS: 2289 

|

State License: 4965 

4.5

Rating: 4.5stars out of 5

Bankrate Score

• About the Lender

Recent Customer Reviews

Rating: 4.94 stars out of 5

4.9

1049 reviews

• Highly Recommend HomeFinity

  Rating: 4.39 stars out of 5

• Great rate, easy process

  Rating: 4.39 stars out of 5

Read full lender review

Factors that determine your mortgage rate

Your mortgage rate depends on a number of factors, including your individual credit profile and what's happening in the broader economy. These variables include:

• Your credit and finances: The better your credit score, the better interest rate you'll get. The same goes for the size of your down payment and the amount of debt you carry: Generally, if you have more money to put down, you'll get a lower rate. If you have additional debt, your rate might be higher.
• Loan amount: The size of your loan can impact your rate.
• Loan structure: Your rate varies whether you're obtaining a fixed-rate or adjustable-rate loan. It also depends on the length of the loan (for example, 30 years or 15 years).
• Location of the property: Rates vary depending on where you're buying.
• Whether you're a first-time homebuyer: Many first-time homebuyer loan programs include a lower-rate mortgage.
• Economic factors: Broadly, mortgage rates are impacted by forces like the Federal Reserve, inflation and investor appetite.
• The lender you work with: Lenders set rates based on many factors, including their own supply and demand.

• How can mortgage points lower my interest rate?

• Should you lock in your mortgage rate?

Mortgage FAQ

• What is a mortgage and how does it work?

• How much are closing costs on a mortgage?

• Who are the best mortgage lenders?

How to refinance your current mortgage

Now that rates are higher, few homeowners today can save money with a standard rate-and-term refinance.
 
Even so, refinancing your mortgage might still make sense in some cases. Perhaps you want to switch from an ARM to a fixed-rate loan before your variable rate resets. Maybe you want to ditch your FHA loan to eliminate mortgage insurance. Perhaps you need to refinance due to divorce or other circumstances. If you want to pay down your mortgage more quickly, you can refinance and shorten your term to 20, 15 or even 10 years. Because home values have risen sharply in the last few years, it's also possible that a refinance could free you from paying for private mortgage insurance. The bump in value might allow you to refinance and tap your home equity to pay for home renovations, as well.

 

There are upfront costs associated with refinancing, including for the appraisal, so you'll want to be sure the savings outpace the refinance price tag in a reasonable amount of time. Most experts say the ideal breakeven timeline is 18 months to 24 months.

 

Compare refinance rates and do the math with Bankrate's refinance calculator.

Written by: Jeff Ostrowski, senior mortgage reporter for Bankrate

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.

Read more from Jeff Ostrowski

Reviewed by: Greg McBride, chief financial analyst for Bankrate

Greg McBride, CFA, is Senior Vice President, Chief Financial Analyst, for Bankrate.com. He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.

Read more from Greg McBride

Article belongs to Current rates.com

Elevated borrowing costs suppress California home sales to the lowest level in 16 years, C.A.R. reports

• Existing, single-family home sales totaled 223,940 in November on a seasonally adjusted annualized rate, down 7.4 percent from October and down 5.8 percent from November 2022.
  
  
• November's statewide median home price was $822,200, down 2.2 percent from October and up 6.2 percent from November 2022.
  
  
• Year-to-date statewide home sales were down 25.9 percent in November.
  
  

LOS ANGELES (Dec. 19) – As borrowing costs remained elevated, California existing home sales registered the biggest monthly decline in the past year and dropped to the lowest level since the Great Recession in November, theCALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

Infographic: https://www.car.org/Global/Infographics/2023-11-Sales-and-Price

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 223,940 in November, according to information collected by C.A.R. from more than 90 local REALTOR^® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2023 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

November's sales pace was down 7.4 percent on a monthly basis from 241,770 in October and down 5.8 percent from a year ago, when a revised 237,730 homes were sold on an annualized basis. Sales of existing single-family homes in California remained below the 250,000-unit pace for the third consecutive month. The annual decline was the 29th straight drop, but the decline was the smallest in the last 20 months.

"Elevated mortgage interest rates and a persistent shortage of homes for sale hindered home sales in November," said 2024 C.A.R. President Melanie Barker, a Yosemite REALTOR^®. "With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could reenter the market early next year."

November's median home price took a step back from the previous month but rose from the year-ago level for the fifth straight month. California's statewide median price decreased 2.2 percent from October's $840,360 to $822,200 in November and rose 6.2 percent from a revised $774,150 recorded a year ago. The monthly price decline was the largest in 10 months but was smaller than the October-to-November average price adjustment of -2.5 percent observed in the last five years. The year-over-year price gain was the largest in 18 months.

"While sales have been weak for the past several months, a tight supply of homes for sale is keeping home prices from falling," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "Going into 2024, the recent decline in mortgage rates, along with the upward momentum in home prices, could motivate more would-be sellers to list their homes for sale in the spring homebuying season."

Other key points from C.A.R.'s November 2023 resale housing report include:

• At the regional level, sales in all major regions dipped in November on a year-over-year basis. The Central Valley region experienced the biggest dip of -14.4 percent from a year ago, followed by the Central Coast (-10.4 percent) and were the only two regions with a drop of more than 10 percent from the same month of last year. The San Francisco Bay Area (-6.2 percent), Southern California (-5.6 percent) and the Far North region (-5.5 percent) also recorded sales drops from last November but at a more moderate pace.

   

• Thirty-four of the 52 counties tracked by C.A.R. registered a sales decline from a year ago, with 23 counties dropping more than 10 percent year-over-year and 12 counties falling more than 20 percent from last November. Calaveras (-33.3 percent) had the biggest sales dip, followed by Butte (-32.3 percent) and Mendocino (-31.9 percent). Fifteen counties recorded sales increases from last year, with San Benito (68.4 percent) gaining the most year-over-year, followed by Mono (66.7 percent) and Lassen (30.0 percent).

• At the regional level, home prices increased in all major regions from a year ago in November. All regions registered at least a 2.7 percent yearly increase in their median prices last month, with Southern California (9.9 percent) posting the biggest year-over-year gain of all regions. The Central Coast region came in second with an increase of 6.1 percent, followed by the Central Valley (5.5 percent), the San Francisco Bay Area (4.4 percent), and the Far North (2.7 percent).

  Home prices continued to improve in many counties across the state, with 34 counties registering a year-over-year median price gain in November and 16 counties recording a decline from a year ago. Orange County (18.2 percent) posted the biggest price increase, followed by San Benito (17.2 percent) and Yuba (15.5 percent). At the other end of the spectrum, Napa (-22.7 percent) recorded the biggest price decline, followed by Lassen (-19.1 percent) and Mariposa (-12.0 percent).

• Housing inventory improved from last month but was due mostly to the sales decline rather than an increase in active listings. The statewide unsold inventory index (UII) increased 11.1 percent on a month-over-month basis to 3.0 months and fell below last year's level by -6.3 percent.Active listings at the state level dipped again on a year-over year basis for eight straight months, and the decline in each of the last seven months all registered more than 10 percent year-over-year.
  
  
• Nearly two-thirds of all counties (31) registered declines in active listings from last year, with 23 of them dropping more than 10 percent on a year-over-year basis. Sutter (-38.7 percent) posted the biggest year-over-year drop in November, followed by Contra Costa (-35.0 percent) and Alameda (-33.3 percent). Eighteen counties recorded a year-over-year gain, with Del Norte registering the largest yearly gain of 38.3 percent, followed by Yolo (27.7 percent) and El Dorado (25.8 percent). On a month-to-month basis, more than four out of five counties (44) dropped in active listings, while only seven counties increased monthly from October as market activity continued to slow during the holiday season.
  
  
• However, new active listings increased in 25 of the 50 counties tracked by C.A.R. from a year ago, with Mono surging the most at 633.3 percent, while new active listings in Tehama (100 percent) and Glenn (80 percent) jumped 80 percent or more. Conversely, new active listings in 23 counties declined from a year ago, with San Francisco (-33.7 percent) dropping the most, followed by Mariposa (-31.3 percent) and Lassen (-23.5 percent).
  
  
• The median number of days it took to sell a California single-family home was 21 days in November and 29 days in November 2022.
  

• C.A.R.'s statewide sales-price-to-list-price ratio* was 100 percent in November 2023 and 96.7 percent in November 2022.
  
• The statewide average price per square foot** for an existing single-family home was $421, up from $388 in November a year ago.
  
• The 30-year, fixed-mortgage interest rate averaged 7.44 percent in November, up from 6.81 percent in November 2022, according to C.A.R.'s calculations based on Freddie Mac's weekly mortgage survey data.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS^® throughout the state and represent statistics of existing single-family detached homes only. County sales data is not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its original list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 51 counties.

Leading the way…® in California real estate for more than 117 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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November 2023 County Sales and Price Activity

(Regional and condo sales data not seasonally adjusted)

r = revised

November 2023 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

r = revised