Mortgage Rates Tuesday: Not Much Change as Equity Rises

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The average interest rate on 30-year, fixed-rate mortgages was unchanged, while rates on 15-year fixed loans rose one basis point. The average rate on 5/1 ARMs went up two basis points, according to a NerdWallet survey of daily mortgage rates published by national lenders Tuesday.

The rate on a 30-year fixed-rate mortgage is five basis points higher than a week ago, and 44 basis points higher than a year ago.

As any home shopper knows, home values have been rising. And the equity that Americans have in those homes is rising right along with those values. Homeowners had $13.9 trillion in equity — the value of homes in the U.S. minus outstanding mortgage debt — in the second quarter of this year, according to the Federal Reserve. That reflects an increase in equity of $1.4 trillion compared with a year earlier, and an increase of $400 billion compared with the first quarter of this year.

Before this year, the previous peak in equity occurred in the first quarter of 2006, at $13.4 trillion. Then, the housing bubble burst, home values plunged and equity fell to a little under $6 trillion in the first quarter of 2009. Homeowners’ equity, which bounced around for a couple of years after that, has been steadily rising since the first quarter of 2011.

As mortgage rates rise, homeowners will be less inclined to do cash-out refinances to turn their equity into cash. That leaves an opening for homeowners to get home equity lines of credit: About 10 million consumers are expected to get HELOCs from 2018 to 2022, according to a new study by the credit bureau TransUnion.


(Change from 10/23)
30-year fixed: 4.09% APR (NC)
15-year fixed: 3.53% APR (+0.01)
5/1 ARM: 4.03% APR (+0.02)

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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Mila has been writing both opinion based articles as well as hard news for over either years both for Tutor Times as well as other reputable news organizations. Mila specializes in political news and world news.