After hitting a low point last month, mortgage interest rates are continuing to tick back up along with activity in the home-buying market for spring.
Rates rose to an average 4.17% on a 30-year fixed-rate mortgage for the week ending April 18, according to Freddie Mac. That's continuing an upward trend after hitting their lowest point this year, 4.06%, in March. The average last week was 4.12%. But cash-strapped buyers should take solace in that rates are still well below their 4.47% average of this time a year ago.
While these may seem like incremental gains, even a tiny increase can add up when it comes to a buyer's bottom line. The fact that rates are still 30 basis points below last year can save buyers about $40 a month on their mortgage payments for a $300,000 home that they put 20% down on. (A basis point is 0.01%.)
"The jump in buyer purchasing power from lower rates and wage gains pushed [the number of] purchase mortgage applications to a nine-year high this week," says realtor.com® Chief Economist Danielle Hale. "More homes available for sale this year is another plus for buyers, who are grappling otherwise with rising home prices."
However, buyers must also contend with record-high home prices in many real estate markets across the country. The national median home list price reached $300,000 in March, according to realtor.com®. And it's likely to keep going up as more buyers flood the market in the warm-weather months, says Hale.
"This week's [latest increase] may add a sense of urgency for home buyers hoping to take advantage of lower rates while they last," she says.