FHA Interest Rates Back to 5%

It’s been an interesting week for the FHA loan rates.

We’ve had every piece of bad news that mortgages could hear:

1. The economy is rebounding.  We’re seeing expansion in nearly every key metric.
2. Housing is on a roll.  This also has negative signals for the FHA interest rates.
3. Inflation is starting to creep up.  Inflation equals higher rates.

Still, after all of this bad news and after losing 11 of the last 15 trading sessions, the FHA mortgage rate is still at 5%.  That’s surprisingly great news.

We’re still looking at an odd scenario where the rate is 5% for FHA vs Conventional rates at 5% as well.  That conventional rate requires a 740 FICO for the best rate.  For a buyer with a 700 FICO score, it is actually cheaper to get the FHA loan.  That’s significantly different than just a few years ago.