Today’s mortgage rates in Chicago
Mortgage rates are prone to fluctuations, especially those of the larger Chicago area. A few years ago, many benchmark mortgage rates in Chicago were on an upward trend. Today, the story differs. To understand the trend of benchmark mortgage rates, we first have to address its fluctuations over the years.
Mortgage rates in 2017
In December, 2017, quite a lot of benchmark mortgage rates were on the upside in the Chicago area. To be particular, the key 30-year mortgage rate of the city spiked.
At the ending of 2017, the national average mortgage rate was at 4.09%. However, the average 30-year fixed mortgage rate for the Chicago area rose as far as 4.11%. A significant increase, this, as the local rate totally eclipsed the national average mortgage rate.
Due to the increase in the 30-year fixed mortgage rate in Chicago, it made harder for homebuyers to borrow. Refinancers also struggled to source funds from financial institutions. If we assume a mortgage of $165,000, the climb in the 30-year fixed rate will add a significant cost to the $800 in monthly payments.
This is all hypothetical however as mortgage rates are affected by more than the national average. It is only ideal that we discuss the factors that influence mortgage rates at anytime, anywhere, in any year.
Factors that Determine Mortgage Rate
Mortgage interest rates are the major determinants only the long term costs of all home purchases. The volatility of the mortgage rates has many mortgage borrowers constantly seeking for the best possible rates. Mortgage lenders are indifferent and only have to manage risk on whatever interest rates they decide do charge.
That being ironed out, the best, and also the least, mortgage rates mainly hinge on the homebuyer’s strong finances and great credit history. While the borrower’s financial health is paramount to what interest rates are given them, larger economic variables affect mortgage rates immensely.
So, you don’t have to be cautious of mortgage rates anymore. The following factors will help you determine the upward and downward trends of present and future mortgage rates
Inflation drives up prices, that much is known. It’s also arguably the most influential factor in the world of mortgage rates. Because inflation reduces the purchasing power of dollar as time progresses, money lenders may be forced to maintain mortgage rates at levels which yield a real net profit.
- Economic Growth Levels
A few important economic growth indicators are employment rate and GDP. They affect mortgage rates. Economic growth levels on the high side increases demand for mortgage loans. This drives up mortgage rates, which benefits lenders really, but not the homebuyer. A declining economic growth leads to decline in wages which reduces mortgage demands. Mortgage rates drop.
Other factors are Federal Reserve money policy, the bond market and housing market activity.
Today’s Mortgage Rates in Chicago as at 2/Aug/2019
Loan Program Rate APR*
30-Year Fixed 3.850% 4.219%
15-Year Fixed 3.250% 3.491%
7/1 ARM 4.000% 4.425%
30-Year Fixed Jumbo 4.250% 4.324%
30-Year Fixed FHA 3.500% 4.377%
30-Year Fixed VA 3.625% 3.874%
Note: APR means annual percentage rate of change. It is the annual financial charge equivalent of the monthly mortgage rates.
The following week will surely bring news that will change the mortgage rates. They fluctuate daily, so pay close attention as those little differences in rates could save you thousands of dollars in the long run.