The foreclosure site RealtyTrac reports that default actions rose 14% in the third quarter, the first rise after five consecutive quarterly declines. The figure suggests that lenders are finally recovering from the robo-signing scandal that brought foreclosure activity to a near halt last fall and moving to clear delinquencies on their books again. The large backlog of such properties, however, will still take some time to clear - maybe a year or more - and as long as that backlog remains, the housing market will likely not recover.
Those looking to buy the distressed properties will find them a little bit costlier this week thanks to the quick reversal of the mortgage rate escalator from down to up. Benchmark mortgage rates posted double-digit increases across the board on this week's Bankrate.com weekly national survey of lenders. The benchmark rate for a 30-year fixed-rate mortgage rose 16 basis points to 4.37% with an average 0.4 discount and origination fee points, the 15-year fixed benchmark rate climbed 13 points to 3.59%, and the 5-year ARM rate rose 15 points to 3.26%.
Bankrate attributed the rise in part to rising confidence that euro zone nations will put together a package to bail out debt-ridden euro zone member countries. That growing confidence, which was not derailed by Tuesday's no-confidence vote in Slovakia, has led investors to pull money out of Treasuries and return to stocks, forcing bond prices down and yields higher. Mortgage rates follow bond yields, hence the spike.
However, in a reversal of their tendency over the past several weeks, most of the lenders surveyed by Bankrate.com for its weekly Rate Trend Index said mortgage rates would fall in the week ahead. Fully 55% of those surveyed said rates would go down, about the same percentage as accurately predicted they would rise last week (54%). Another 18% said they would hold steady, while 27% said they would rise.
Rates continue double-digit gains for week on overnight surveys
Mortgage rate movements on the overnight surveys had been pointing in the direction they took on the Bankrate survey for most of the week since the last one, and today's mortgage rates continue to head that way. While day-to-day movements were mixed and small, week-to-week movements remained large and upward.
This morning's average mortgage rates on the Bankrate.com overnight survey, with changes from yesterday and one week ago, are: 30-year fixed, 4.2% (+2 points, +17 points); 15-year fixed, 3.5% (-1 point, +12 points); 5-year ARM, 3.08% (unchanged, +8 points); 30-year fixed refinance loan, 4.29% (+1 point, +16 points).
Yesterday's average afternoon mortgage rates on the Zillow.com National Mortgage Marketplace, with changes from Tuesday and one week ago, are: 30-year fixed, 4.03% (+3 points, +24 points); 15-year fixed, 3.42% (+2 points, +23 points); 5-year ARM, 2.92% (-2 points, +28 points). Today's real-time rates as of 7 a.m., with changes from yesterday morning and afternoon, are: 30-year fixed, 4.02% (+2 points, -1 point); 15-year fixed, 3.4% (unchanged, -2 points); 5-year ARM, 2.8% (-6 points, -12 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). One discount point represents one percent of the total value of a mortgage, paid as interest up front.