March 2018 Mortgage Newsletter

Mortgage Rates Higher
The upward trends for mortgage rates continue and we are approaching 6 year highs. Freddie Mac forecasted rates at 4.6% for 2018 and that’s the highest I recall seeing. Last year when forecasts were being made, I don’t think anyone predicted such a steep rise. Let’s hope rates stabilize soon. I am not sure how consumers would react to 5% rates especially since we have not seen rates that high in many years.

As we approach the historically busy spring market, I would say that the number of prospective clients seeking pre-approvals and inquiries has been just as good as past years, if not better. If this is an indicator of things to come, the market should be stable. Many of our Real Estate Partners have mentioned that their client pipelines are as healthy as ever.

To illustrate just how much the interest rates have gone up in a short period of time and how they compare to the past several years, let’s take a look at some of the historic interest rates as reported by Freddie Mac:

Rates Points (Lender Fees)
Last Week 4.4% .5
January 2018 4.03% .5
2017 3.99% .5
2016 3.65% .5
2015 3.85% .6
2014 4.17% .6
2013 3.98% .7
2012 3.66% .7
2011 4.45% .7
Wow! We are only .05% off the average of 2011! As you can see, this is a significant number.

Recently I was reminded by some senior Mortgage Bankers that in the early 80s, interest rates were as high as 18% and there was still plenty of activity. Personally I recall paying over 7% when we purchased our first home several years ago in Montgomery. Even 5% is an incredible rate. This is something all current homebuyers should keep in mind, especially the Millennials. On a positive note, hopefully interest rates will go down in the future and there will be an opportunity for borrowers to refinance into lower interest rate Mortgages and or Mortgages with a shorter term.

Our interest rates are consistently .25% lower than other lenders. In a rising interest rate environment, this is very important as it can make a difference in home owner affordability. Our current rates as of February 1 are:

Conventional 30 Year Fixed 4.25% APR

Conventional 15 Year Fixed 3.75% APR

FHA 30 Year Fixed 3.75%

10 Year ARM 4%

7 Year ARM 3.875%

The above rates reflect an increase of .25% over what I reported in last month’s Newsletter. As interest rates rise, consumers will consider ARMs. This will be particularly desirable for Jumbo mortgages and for those that have a definitive exit plan if rates go up. For conforming mortgage borrowers, in my opinion, the rates are still low and if you can afford it, go with the fixed rate mortgage.

I would like to thank all of those that have been attending our past seminars. For more information regarding upcoming seminars, please visit

Vibha Singh
NMLS ID 66034

Ambika Singh
Loan Officer
NMLS ID 1541005

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