Salient to Investors:
Freddie Mac said the average rate for a 30-yr fixed mortgage rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987. The average 15-yr rate climbed to 3.5 percent from 3.04 percent. The average rate for a 30-yr mortgage in the 10 years through last week was 5.3 percent. At the current rate, the monthly payment on a $300,000 30-yr loan is $1,513.
S&P/Case-Shiller said house prices in 20 US cities rose 12 percent in April, the biggest year-over-year gain since March 2006.
Paul Diggle at Capital Economics said higher mortgage rates won’t snuff out the housing recovery, but are another reason to expect a slowdown from the very rapid rate of price rises. Capital Economics increased its 2014 mortgage-rate forecast for 30-yr loans to 5 percent from a previous estimate of 3.75 percent.
Contract signings to buy previously owned homes climbed in May to a six-year high.
Joseph Lavorgna at Deutsche Bank Securities said the rate increase will not meaningfully impact the fundamental recovery in demand because affordability remains high relative to history. Lavorgna said rates are rising partly because of expectations of an improving economy, and so rising job and income prospects will offset some of the higher mortgage financing costs.
Read the full article at http://www.bloomberg.com/news/2013-06-27/mortgage-rates-in-u-s-jump-to-highest-since-july-2011.html
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