Housing starts jump in September; today's mortgage rates barely budge

Sandy Smith's picture

The pace of new residential construction picked up in September, according to the Census Bureau and HUD. Meanwhile, current mortgage interest rates continued to drift weakly, with some rising and others falling from week-ago levels.

The Census Bureau and the Department of Housing and Urban Development announced this morning that new private housing starts ran at a seasonally adjusted annualized pace of 658,000 in September, up 15% from August's pace and 10.2% from the rate last September. New housing completions rose by 2.1% from both the previous month and one year ago, climbing to a seasonally adjusted annual rate of 647,000, but new building permits fell 5% from the previous month to a seasonally adjusted annual rate of 594,000, 5.7% above last year's pace.

While these figures point to overall growth in the housing market, the rate of growth varies depending on the type of housing. New single-family homes were started at a seasonally adjusted annual rate of 425,000, 1.7% higher than last month. This indicates that multi-unit housing starts are growing faster, which in turn suggests continued relative weakness in the primary residential real estate market.

One reason why this is the case has to do with American households' deteriorated credit standing. Owners who have had their homes foreclosed upon will of necessity find themselves renters for at least the next few years. Would-be homeowners who have difficulty obtaining home mortgages due to tighter credit standards will also likely end up renting despite their preference for ownership. The leading industry trade group representing real estate agents, the National Association of Realtors, has repeatedly called for lenders to relax their lending criteria in order to give a boost to the still-struggling market for single-family homes.

Today's mortgage interest rates move modestly on overnight surveys

In a rare occurrence, today's mortgage interest rates on the Bankrate.com overnight survey moved not at all from yesterday's levels. Movements in either direction were modest for both the day and the week on both of the major overnight surveys.

This morning's average mortgage rates on the Bankrate.com overnight survey, with changes from yesterday and one week ago, are: 30-year fixed, 4.19% (unchanged, +4 points); 15-year fixed, 3.46% (unchanged, -2 points); 5-year ARM, 3.04% (unchanged, -3 points); 30-year fixed refinance loan, 4.29% (unchanged, +3 points).

Yesterday's average afternoon mortgage rates on the Zillow.com National Mortgage Marketplace, with changes from Monday and Sept. 13, are: 30-year fixed, 3.99% (+1 point, -4 points); 15-year fixed, 3.34% (+1 point, -8 points); 5-year ARM, 2.85% (unchanged, -7 points). Today's real-time rates as of 8 a.m., with changes from yesterday morning and afternoon, are: 30-year fixed, 3.94% (-5 points, -5 points); 15-year fixed, 3.31% (-3 points, -3 points); 5-year ARM, 2.8% (-12 points, -5 points).

One basis point equals one hundredth of a percentage point. Rates reported in this article assume good credit (FICO score of 650 or higher) and a 20% down payment. Morning rates from Zillow.com are for loans for the most creditworthy borrowers (FICO score of 720 or higher).

Comments

Submitted by Stock trader (not verified) on
Interestingly the current mortgage rates started to go up in China. Major banks in China's large cities have started raising mortgage rates for first-time home buyers, putting further pressure on the housing market. In the United States the latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 7 basis points to 4.26%.

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