Mortgage rates decline, but housing prices are on the rise

by Allie Sanchez21 Jun 2017
Mortgage rates are on a general downtrend, according to Bankrate.com. The site averages reflected the overall lower mortgage rates compared to those observed before the most recent economic downturn, Bankrate.com said.

The company computes rate averages from various institutions, and the rates tend to be volatile as they change daily.

According to the report, 15-year terms remain advantageous because customers tend to save thousands of dollars in interest payments and they are able to build equity more quickly compared with 30-year terms, even if the payments are significantly bigger.

As of June 19, the Site Averages are as follows:
 
Product Rate Last week Change
30-year fixed 3.80% 3.83% -0.03
15-year fixed 3.02% 3.03% -0.01
30-year fixed jumbo 4.23% 4.22% +0.01
30-year fixed refinance 3.78% 3.80% -0.02
Source: Bankrate.com

Meanwhile, Federal Reserve vice chairman Stanley Fischer said these rates may have contributed to the “high and rising” trend in home prices.

Fischer said in a Bloomberg report that “There is more to be done, and much improvement to be preserved and built on,” and cautioned against the possibility of another housing bubble like the one observed in 2007 to 2009, which crippled the global economy.

“The world as we know it cannot afford another pair of crises of the magnitude of the Great Recession and the Global Financial Crisis,” he said in a speech delivered in Amsterdam this week.

Fischer explained that the low interest rate environment may be causing the ballooning prices, but that “much has been done” in the US and across the globe to curtail “the worst lending practices.”


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