The next wave of servicing regulation is coming – Are you ready?

Join this webinar to learn what servicers need to know about recent and upcoming servicing compliance regulations and strategies experts are implementing to prepare for servicing regulatory audits.

In a purchase market, rookie LOs may struggle

Rookie LOs in 2020 could ride the refi wave and rack up a hefty monthly paycheck without Herculean effort. But these days, they'll have to sing for their supper.

Logan Mohtashami on trends in forbearance exits

In this episode of HousingWire Daily, Logan Mohtashami discusses several hot topics in the housing market, including recent trends in forbearance exits and future homebuyer demand in the midst of inventory shortages.

Natural disasters and forbearance: What borrowers and mortgage servicers need to know

With a rise in natural disasters, including wildfires, hurricanes, floods, tornadoes and mudslides. The mortgage industry needs to be proactive in examining programs to help borrowers recover.

Mortgage

Freddie Mac: Mortgage rates exceed 4% for first time since July

Is this goodbye to interest rates in the 3% range?

Mortgage rates continued rising in the last week, eventually breaching 4% for the first time since last summer, according to Freddie Mac’s latest Primary Mortgage Market Survey.

Freddie Mac’s report, which was released Thursday morning, shows that the 30-year fixed-rate mortgage rose to an average of 4.04% for the week ending Jan. 18, 2018.

That continued a recent trend of mortgage rates climbing. Last week, the 30-year mortgage checked in at 3.99%.

In fact, this week’s average of 4.04% was the first time that benchmark interest rate broke 4% since July 2017. Interest rates are also the highest they’ve been since May 2017. A year ago at this time, interest rates averaged 4.09%.

Mortgage rates Jan. 18, 2018

(Click to enlarge. Image courtesy of Freddie Mac)

Last week, Zacks, which provides research for investors, predicted that interest rates would climb due to the rise in Treasury yields, and that's just what happened. Here’s Zack’s explanation of the relationship between Treasury yields and mortgage rates:

There is a strong correlation between mortgage interest rates and Treasury yields, according to a plot of 30-year conventional mortgages and 10-year Treasury yields using Federal Reserve Economic Data. Mortgage interest rates are higher than Treasury yields because mortgages are riskier than Treasury bonds. The risk is that some homeowners get into financial difficulty and default on their mortgage obligations. The difference, or spread, between Treasury yields and mortgages interest rates is the risk premium.

So, as Treasury yields rise, so do mortgage rates.

And as Freddie Mac Deputy Chief Economist Len Kiefer explains, interest rates may not fall back below 4% for some time, if at all.

“Some may be wondering if this is the last time we'll see a three handle on the 30-year mortgage rate,” Kiefer said. “Never say never, but inflation is firming, the Federal Reserve’s Beige Book indicates broad-based economic growth and labor markets are tightening. This means upward pressure on long-term rates, like the 30-year fixed-rate mortgage, is building.”

Additionally, Freddie Mac’s report showed that the 15-year FRM averaged 3.49%, up from last week when it averaged 3.44%. A year ago at this time, the 15-year FRM averaged 3.34%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.46% this week, unchanged from last week. A year ago at this time, the 5-year ARM averaged 3.21%.

Most Popular Articles

These are the hottest housing markets in America

A housing market report from RE/MAX found that 36 of 51 metro areas had double-digit year over year sale price increases in August. Boise led the way.

Sep 17, 2021 By

Latest Articles

Radian expands its online title insurance platform

Radian Group recently announced the launching of its title insurance and closing services platform, titlegenius, in Arizona, California, Nevada, Ohio and Pennsylvania

Sep 20, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please