Mortgage rates were little changed last week. Fixed 30 year mortgage interest rates dropped to an average of 5.78% compared with 5.79% the week before. While the 30 year interest rate is below the 2005 high of 6.08% from March, it matches its level of last summer. The National Association of Realtors also reported that the median home price is $218,000, up 14% from a last summer.
Government reports show home prices are up more than 50% over the last five years, fueled by the lowest interest rates in decades. Fixed 15 year mortgage interest rates last week averaged 5.41%, up from 5.40%. Rates on one-year adjustable rate mortgages dropped to 4.84% last week from 4.85% one week before. Adjustable rate mortgages’ share of activity stood at 28.1% of total mortgage applications taken last week, down from 28.9% the week before.
With adjustable rate mortgages, lower payments allow individuals to buy homes they may not be able to afford with a fixed rate mortgage loan. In report sales of homes dropped 2.6% in July as the rate of both condominium and single-family home buying slowed across the country. Despite the drop, this summer’s sales are the third highest on record.