Mortgage rates in 2013 have increased to an annual high as new home construction in the United States has risen during February. New building permits have risen to the highest levels seen in five years, leading many to believe that the economy is improving along with the housing market.
As previously reported by The Inquisitr, mortgage rates were at an all-time low in the fall of 2012 due to fears over the fiscal cliff. Mortgage rates for a 30-year fixed loan were at 3.31 percent, the lowest on records dating to 1971. The average on the 15-year fixed mortgage were as low as 2.63 percent, also a record low.
The mortgage rates for 2013 just hit an annual high, with 30-year fixed mortgage rates jumping to 3.88 percent, but FHA based mortgage rates are still around 3.45 percent. Mortgage rates for 15-year fixed loans also broke the three percent barrier, rising to 3.08 percent.
Barney Hartman-Glaser, real estate finance professor at Duke University, believes that rising mortgage rates may force reluctant home buyers to pull the trigger before the rates get any higher:
“Although important, rising interest rates alone are not enough to slow down the housing recovery. My sense is that underwriting standards are getting easier to satisfy, and so we would expect rates to rise as slightly more risky borrowers are brought into the fold.”
Throughout the United States housing prices are going up and many hard-hit markets are improving. This is mostly due to QE3 and QE4 driving mortgage interest rates to record lows, which had many, including this writer, refinancing their house, but overall this is still a good sign. For example, based upon estimates provided by Zillow, my own house has gone up in value by about $10,000 just in the last six months.
With mortgage rates still relatively low, home builders broke ground on 917,000 homes at an annual rate, up 0.8 percent. Building permits are up 4.6 percent to 946,00, the strongest numbers seen since June 2008.
Anika Khan, senior economist at Wells Fargo Securities LLC, says, “The fundamentals are still supportive of better housing starts. We continue to see solid household formation which leads us to believe the housing recovery has legs.”
With mortgage rates still at relative historical lows, do you plan on constructing a new house or refinancing?