Houston Mortgage Rates

Frequently Asked Questions (FAQs)


Mortgage Rates Houston, TexasWhat are current Houston mortgage rates?

2011 saw the lowest Houston mortgage rates since Freddie Mac began surveying interest rates in 1971. 2012 Houston mortgage rates have remained at record-setting low levels. Get started on your Houston mortgage purchase or refinance today. Houston mortgage rates change daily; contact us for today’s rates.

Monthly Average Commitment Rate And Points 
30-Year Fixed-Rate Mortgages

Freddie Mac – Primary Mortgage Market Survey® (PMMS®)













January 3.67 0.6 4.43 0.7 3.41 0.7 3.92 0.8
February 3.71 0.6 4.30 0.7 3.53 0.8 3.89 0.8
March 3.77 0.6 4.34 0.6 3.57 0.8 3.95 0.8
April 3.67 0.6 4.43 0.7 3.44 0.8 3.91 0.7
May 4.19 0.6 3.35 0.7 3.80 0.8
June 4.16 0.6 4.07 0.7 3.68 0.7
July 4.13 0.6 4.37 0.8 3.55 0.7
August 4.12 0.6 4.46 0.7 3.60 0.6
September 4.16 0.5 4.49 0.7 3.47 0.6
October 4.04 0.5 4.19 0.7 3.38 0.7
November 4.00 0.5 4.26 0.7 3.35 0.7
December 3.86 0.6 4.46 0.7 3.35 0.7
Annual Average 4.17 0.6 3.98 0.7 3.66 0.7

Who sets the mortgage rates?

Houston mortgage rates are ultimately driven by the prices of Mortgage Backed Securities (MBS). Although lenders set their own mortgage rates, those rates are greatly influenced by the current prices of MBS.

What are Mortgage Backed Securities (MBS)?

MBS are groups of mortgages packaged into securities for sale in the secondary market. Similar to the stock market, these packaged securities, or MBS, are traded in markets. The amount the investors will pay for them is what drives Houston mortgage rates.

Why are mortgage rates constantly changing?

Before mortgages are packaged into securities, they are originated by direct lenders. Then, mortgage lenders sell the loans to wholesale and correspondent lenders. The wholesale and correspondent lenders often purchase the loans with the intent to package and resell the MBS to a secondary market. Therefore, the price for which the loans are sold at various interest levels influence the rate and price a lender can offer to borrowers. Because mortgage loans undergo this process, the value of the mortgages, or the price of MBS, are directly linked to the price for a certain interest rate. Consequently, as the value of MBS increases or decrease, mortgage rates follow suit.

Who is trading in the MBS markets?

Major financial institutions in the mortgage industry are frequently trading in the MBS markets. They have the skill to evaluate the value of a MBS, and adjust the prices of MBS based on demand.

Is there one standard interest rate?

The Federal Reserve controls the Fed Funds rate, a short-term rate banks charge each other. Investors often use the yield on a 10 to 30-year “risk free” Treasury bond as a standard for comparison. All other interest rates are alternate investment choices. When rates on the other fixed-income securities go up, Houston mortgage rates will likely go up as well.

What factor has the greatest impact on Houston mortgage rates?

There are two factors considered to have the greatest impact on interest rates: economic growth and inflation. As the economy grows, the demand for capital increases, which leads to a higher cost for borrowing money. A higher inflation rate will also increase Houston mortgage rates, but for a different reason. Inflation decreases the value of a dollar; therefore, a lender will demand a greater amount back at a later date to compensate for the lost purchasing power.
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