Interest rates on mortgages increased for the third consecutive week, according to Bankrate’s March 16 survey of large lenders. But there’s no need to panic just yet.
“As far as a monthly payment is concerned, it’s not the end of the world,” says Brett Sinnott, vice president of capital markets at CMG Financial in San Ramon, Calif.
The rate increase happened in advance of the Federal Reserve’s policy-setting meeting, which ended Wednesday.
Federal funds rate holds steady
The central bank, citing global economic concerns, decided the federal funds rate would keep its place between 0.25 percent and 0.5 percent, where it has been since December.
“There’s not enough going on in order for them to pull the trigger,” says Jim Sahnger, mortgage planner for Schaffer Mortgage in Palm Beach Gardens, Fla. “They really kind of put themselves up against the wall with all the talk that they wanted to raise rates, and with what we see taking place both domestically and abroad, there’s not enough for them to (raise rates).”
A look at this week’s rates
The benchmark 30-year fixed-rate mortgage rose to 3.93 percent from 3.87 percent. A year ago, the rate was 3.91 percent.
Four weeks ago, it was 3.85 percent. The mortgages in this week’s survey had an average total of 0.16 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4 percent. This week’s rate is 0.07 percentage points lower than the 52-week average.
• The benchmark 15-year fixed-rate mortgage rose to 3.17 percent from 3.1 percent.
• The benchmark 30-year fixed-rate jumbo mortgage rose to 3.84 percent from 3.78 percent.
• The benchmark 5/1 adjustable-rate mortgage rose to 3.43 percent from 3.33 percent.
Housing starts up
Housing starts surged last month, according to data released Wednesday from the U.S. Census Bureau and the Department of Housing and Urban Development. Housing starts jumped 5.2 percent from January to February to a seasonally adjusted annual rate of 1.178 million. Last month’s rate is 30.9 percent above the year-ago rate.
And applications down
Mortgage applications fell by 3.3 percent last week compared with the previous week, according to the Mortgage Bankers Association’s weekly survey.
Refinances dropped 6 percent while purchases inched up 0.3 percent. The unadjusted purchase index rose 1 percent compared with the week prior, and was 33 percent higher than the same week in 2015.
Leaving money on the table?
Current homeowners who have yet to consider refinancing might be leaving money on the table, Sahnger says: “We still continue to deal with people every month that are saving anywhere from $200 to $500 a month or more.”
It could be worth it to take a look at your financial situation to determine whether a refi would benefit you.
“Have somebody give you a total cost analysis over the amount of time that you would actually expect to have the mortgage in play, and see if it makes sense,” he says.