Mortgage rate survey ranks Pa. 4th lowest

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Mortgage rates remain lower than many financial experts would have expected them to be three years after sliding to a historic low point.

While rates vary from lender to lender and depend on a customer’s credit score, on average the mortgage rates being offered in Pennsylvania are the fourth lowest in the nation, according to GOBankingRates, a mortgage rate comparison website based in El Segundo, Calif.

The company surveyed rates for all 50 states and the District of Columbia using data from Fort Atkinson, Wis.-based rate-tracking service RateWatch. The study looked at 15-year fixed, 30-year fixed and five-year adjustable rate terms in the database — more than 102,000 mortgage products — to find the weighted average for each state and D.C.

When the data was pulled on July 3, the average 30-year mortgage rate in the U.S. was 3.75 percent. For Pennsylvania, the average rate was 3.55 percent.

The best place to finance a home, according to GOBankingRates, is Rhode Island, which had an average mortgage rate of 3.39 percent. The most expensive state to take out a home loan was Nebraska, where the average mortgage rate in the survey was 4.1 percent.

Average mortgage rates tumbled below 5 percent in 2011 and reached their lowest level in 2013 at 3.41 percent, according to Freddie Mac.

There are a number of factors that influence regional mortgage rates — borrower demand, home values and unemployment, for example — and Pittsburgh’s relatively low mortgage rates are likely the result of a combination of the factors, said Christina Lavingia, a GOBankingRates writer.

“Pennsylvania’s unemployment rate remains under the national average and Pittsburgh’s rate dips even below that at 5.3 percent, its lowest since before the recession,” Ms. Lavingia said. “Part of this is, of course, because job seekers are dropping out of the workforce, but even given that caveat, jobs in the city are up over last year.

“Meanwhile, though the city is still decidedly a buyer’s housing market, median home prices are on the rise — up 16.6 percent over last year, according to Zillow — meaning the local economy is rebounding as well.”

The report also found that six of the 10 best states for affordable mortgage rates are located in the Northeast. Conversely, six of the most expensive states are in the Midwest and Northwest.

“Regional factors like borrower demand, local property values and unemployment play a part in mortgage rate variation,” said Matt Shibata, a portfolio manager with Morling Financial Advisors in San Francisco. “Additionally, closing costs are an often overlooked mortgage rate influence.

“Closing costs have lots of regional variations based on state and county laws, fees and taxes,” Mr. Shibata said. “These closing costs differences are the main drivers of the regional variations people see in mortgage rates since they impact the [annual percentage rate], which is the format that lenders must quote in.”

Tim Grant: tgrant@post-gazette.com or 412-263-1591.


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