Spring is when most sellers put their homes for sales and buyers shop for new properties as the weather looks better. But with the buying season already on, mortgage rates picked up for the second straight week.
The Mortgage Reports said that according to Freddie Mac, mortgage rates rose by 7 basis points for the week ending April 29 with average 30-year fixed loan now at 3.66 percent from 3.59 percent the previous week. On one hand, 15-year fixed-rate is now at 2.89 percent while the five-year adjustable-rate mortgage is at 2.86 percent. Aside from the anticipation of the buying season this spring, Federal Reserves' decision not to increase interest rates in this April 2016 meeting also contributed to the boost.
While the rates rose in the past two weeks, the report noted that mortgage rates remain way below 4 percent. This works in favor of buyers who will have more purchasing power, and for those who are refinancing their homes.
Meanwhile, new home sales in the country fell in March particularly in the West region, Reuters reported. Data from the Commerce Department showed a 1.5 percent decline in new home sales to a seasonally adjusted rate of 511,000 units. The West recorded a 23.6 percent drop in sales after it rose 21.7 percent in February. Nonetheless, experts say that the housing market growth remains steady despite these figures. In the Midwest, new homes sales climbed 18.5 percent while the South saw a 5 percent increase last month.
Reuters quoted Kristin Reynolds, a U.S. economist at IHS Global Insight in Lexington, Massachusetts, saying, "With continued improvement in the labor market leading to higher incomes, and borrowing costs that remain low, the fundamentals remain supportive. We expect new home sales to advance throughout 2016."
What remains to be a challenge is that shortage in supply while demand is picking up driven by low mortgage rates and decreased unemployment.
