The days of historically low mortgage interest rates may be coming to an end.
Freddie Mac publishes average mortgage rates weekly for 30 year and 15 year fixed-interest mortgages as well as variable-rate mortgages. Last week was the 4th week in a row that average rates increased for both 30 year and 15 year fixed mortgages.
Although the increases were small (30 year rates rose from 3.55% to 3.66% over the 4 weeks, and 15 year rates rose from 2.83% to 2.89%), it’s been a long time since we’ve seen 4 rate increases in a row.
If you’re a home buyer, rising mortgage interest rates mean either higher monthly mortgage payments or finding a house for a lower price. The real estate market has improved in much of Monmouth County, giving us more sales and fewer homes on the market as buyers try to take advantage of both low home prices and low mortgage rates.
I used to teach statistics, Gaussian distributions, standard deviations, etc. at the college level. When tracking data, it’s statistically unlikely to have four consecutive changes moving in the same direction. However, if we get a fifth change in the same direction, it’s so unlikely that we meet the definition of a “trend”. The weekly update from Freddie Mac comes out tomorrow- plan to see headlines in all of the major newspapers if mortgage rates increase a 5th week in a row.