July Updates: Mortgage Rates Down, Home Prices Up
Mortgage rates dropped this week after a dramatic spike last week. The 30-year fixed-rate mortgage (FRM) averaging 4.29% for the week ending July 3, is down from last week’s two year high of 4.46 percent This time last year, the 30-year FRM averaged 3.62 percent.
“Fixed mortgage rates fell over the holiday week as market concerns over the timing of the Federal Reserve’s pullback in bond purchases eased somewhat,” said Frank Nothaft, VP and chief economist for Freddie Mac. “Rates are still low by historical standards and should continue to aid in housing affordability and the ongoing recovery of the housing market.”
Even though rates receded, they are still a far cry from where they were two months ago.
Home Prices Jump in June
Home prices took a leap 10.7% year-over-year in June. Trulia tracked the 100 largest metro areas and their respective home price metrics. The reports showed 99 markets experienced an increase in asking prices over the last year.
Home prices have been trending upwards the past two years in hot markets like San Jose, Phoenix, Denver and Miami. Markets in the Midwest and East Coast have finally bottomed out over the last 6 months.
Trulia’s chief economist Jed Kolko says, “In the past year, buying a home has become at least 20% more expensive. For young first-time homebuyers who don’t remember life during and before the bubble, these rising costs are a rude awakening.”
Rent also continues to rise, although at a slower pace. In some markets like New York and Philadelphia, rents picked up at a faster pace than asking prices.