Monday, February 16, 2015

30-Year FHA Mortgage Rates Climb, But Still Historically Low

FHA mortgage rates rose a bit this week, according to the latest survey conducted by Freddie Mac. But they’re still hovering at historic lows, well below the 4% mark. Borrowers with excellent credit are currently locking in 30-year rates as low as 3.55%. Here’s an update on FHA mortgage rates past and present, and with an eye to the future.
30-Year FHA Mortgage Rates Averaged 3.69% This Week

The average rate for a 30-year fixed mortgage fell to 3.69% this week, according to the long-running industry survey conducted by Freddie Mac. This average applies to both FHA and conventional home loans within the 30-year category.

The current rate averages in the 15-year fixed and the 5-year ARM categories are hovering just below 3%, and have been in that range for several weeks now.

So how do these current rate averages compared to last month, and to this time last year? Here’s a retrospective comparison:
Still Lower Than Last Month, and Last Year

FHA mortgage rates have come down a bit since the beginning of 2015, and they are significantly lower today than this time last year. This is the exact opposite of what Freddie Mac’s economists were predicting to happen last year at this time.

In December 2014, Freddie Mac’s chief economist Frank Nothaft published an article entitled “A Look Back at Five Predictions for 2014.” In it, he said the following:

    “As we entered 2014, mortgage rates [in all loan categories] had been inching higher and were expected to continue gradually rising throughout 2014. What happened? Quite the opposite happened.”

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