The average interest rate on 30-year, fixed-rate mortgages was unchanged, while rates on 15-year fixed loans rose one basis point. The average rate on 5/1 ARMs went up two basis points, according to a NerdWallet survey of daily mortgage rates published by national lenders Tuesday.
The rate on a 30-year fixed-rate mortgage is five basis points higher than a week ago, and 44 basis points higher than a year ago.
As any home shopper knows, home values have been rising. And the equity that Americans have in those homes is rising right along with those values. Homeowners had $13.9 trillion in equity — the value of homes in the U.S. minus outstanding mortgage debt — in the second quarter of this year, according to the Federal Reserve. That reflects an increase in equity of $1.4 trillion compared with a year earlier, and an increase of $400 billion compared with the first quarter of this year.
Before this year, the previous peak in equity occurred in the first quarter of 2006, at $13.4 trillion. Then, the housing bubble burst, home values plunged and equity fell to a little under $6 trillion in the first quarter of 2009. Homeowners’ equity, which bounced around for a couple of years after that, has been steadily rising since the first quarter of 2011.
As mortgage rates rise, homeowners will be less inclined to do cash-out refinances to turn their equity into cash. That leaves an opening for homeowners to get home equity lines of credit: About 10 million consumers are expected to get HELOCs from 2018 to 2022, according to a new study by the credit bureau TransUnion.
MORTGAGE RATES TODAY, TUESDAY, OCT. 24:
NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.