Will Adjustable-Rate Mortgages Be the Answer?
The Mortgage Bankers Association reported that the average rate on a 30-year fixed mortgage climbed to 7.67%, this is up from 7.53% for the prior week. Such a mortgage requires a 20% down payment. Now buyers are looking to sidestep the higher rate with a rate that’s 15% lower, and allows them to pay down principal at a faster rate.
Welcome to ARMs. It was reported by the Mortgage Bankers Association that the 5/1 ARMs decreased in the interest rate they charge from 6.49% down to 6.33% from the prior week. Now buyers are starting to make the adjustment when buying a home. Applications for ARMs jumped up 6% from the prior week, according to the MBA.
Currently ARMs account for 9.2% of all mortgage applications, which is the highest percentage since November 2022.
Additionally, the Mortgage Bankers Association reported that applications for mortgages for home purchases climbed slightly by 1% from the prior week but were down 19% from the same time last year, in 2022. The report also indicated that loan sizes decreased to their lowest level since 2017.
Even though inventories have gained slightly week over week for the first two weeks in October, traffic has also decreased, and many actual potential buyers are not stepping up to what has been traditionally the best two weeks to buy a house.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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