Mortgage Rates Soar

Mortgage Rates post the largest weekly increase in over 26 years, according to Freddie Mac

by Myles Biggs

Mortgage Rates Reach 26-year high - modular homes offer money saving advantages









CNN Money recently announced that 30-year, fixed-rate home loans have increased this week by 0.53 percentage points to an average of 4.46%. According to Freddie Mac, this is the largest weekly increase in more than 26 years. 

Rates for 15-year loans, a popular option for those home owners looking to refinance, also increased to 3.5% - a jump of 0.46 percentage points.

The graph above shows the stark increase in mortgage rates that has taken place over the past two months. This percentage point increase will cost home buyers with a 30-year, fixed-rate mortgage an extra $56 more per month for each $100,000 borrowed.

While this news of increased mortgage rates is cautionary to some, it also comes on the heels of news from the S&P/Case-Shiller home price index that showed an approximate 12% increase in new home prices when compared to one year ago. New home sales also hit a five-year high in May.

When mortgage rates soar, the time-saving advantages home buyers receive from building a Ritz-Craft modular home become even more apparent. By building homes indoors and at the same time that outdoor site work is completed, overall construction time is reduced, resulting in fewer loan cycles and fewer interest payments for the home owner.

The news of increased mortgage rates has split the public into two schools of thought – those who believe this increase in mortgage rates could derail the housing recovery and those who believe these increases are signs of a normal housing recovery.

What is your outlook? Share your thoughts in the comments section below!