This week, rates for 30-year fixed mortgages ticked up to 4.20 percent, a gain of three basis points over the previous week, and the fourth consecutive weekly gain, according to Freddie Mac's latest data.
The 15-year fixed-rate mortgage averaged 3.64 percent, increasing by two basis points, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage was down one basis point to an average 3.77 percent. Meanwhile, inventory of existing homes dropped, and mortgage applications hit a 9-year high in the past few weeks, according to the Mortgage Bankers Association.
But lending standards are going to get a bit more strict. Last month, the Federal Housing Administration said it would start to require manual underwriting for mortgages that may be more risky. The agency, which guaranteed about 23 percent of new mortgages in 2018, is concerned about borrowers who have lower credit scores in addition to higher debt-to-income ratios.
So-called “risk layering” was commonplace, even encouraged, during the housing bubble of a decade ago. In the squeaky-clean lending environment that emerged after the financial crisis, lenders have been more cautious. But lean supply has driven home prices so high, even as stagnant wages and higher student debt have both made homeownership more challenging for many Americans, especially younger ones.
Advertisement
Related Stories
Housing Markets
States Seek Long-Term Solutions to Reform Property Taxes
Rising home prices typically lead to higher property tax assessments, which has been the case in Mountain West states such as Colorado, prompting lawmakers to grapple with issues surrounding property tax relief
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers