Primary Mortgage Interest Rate Update Sept. 27 2013
The prime mortgage interest rate fell this week following the Federal Reserve announcement that it will maintain its bond buying stimulus. These low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated. For instance, the S&P/Case-Shiller® 20-city composite house price index rose 12.4 percent over the 12-months ending in July, which represented the largest annual increase since February 2006. In addition, more than half of the cities had annual growth exceeding 10 percent and four cities saw increases exceeding 20 percent. These increases in home values have also increased homeowner wealth. For example, homeowners experienced an aggregate $1.4 trillion increase in equity in their homes over the first half of this year which contributed to the overall $4.2 trillion gain in household net worth.