Mortgage interest rates continued their steady climb in the last week and reached the highest level since March 2017, Freddie Mac’s latest Primary Mortgage Market Survey shows.
Freddie Mac’s report, which was released Thursday morning, shows that the 30-year fixed-rate mortgage rose to an average interest rate of 4.15% for the week ending Jan. 25, 2018.
That’s up 11 basis points from last week, when interest rates checked in at 4.04%.
Last week was also the first time that interest rates broke 4% since July 2017.
And it looks like interest rates won’t be falling back below 4% for the foreseeable future, according to Freddie Mac Chief Economist Len Kiefer.
“Rates keep climbing. The 10-year Treasury yield reached its highest point since 2014 reflecting expectations of broad-based economic growth,” Kiefer noted. “Mortgage rates, in turn, followed the surge in Treasury yields. The 30-year fixed rate mortgage jumped 11 basis points to 4.15%, its highest level since March of last year.”
One year ago at this time, the 30-year fixed-rate mortgage averaged 4.19%, but as shown in the chart below, mortgage rates have been climbing on a fairly steady pace since August 2017.
(Click to enlarge. Image courtesy of Freddie Mac)
The interest rates for the 15-year fixed-rate mortgage and the 5-year Treasury-indexed hybrid adjustable-rate mortgage also increased in the last week.
According to Freddie Mac’s report, the 15-year FRM averaged 3.62% this week, up from last week when it averaged 3.49%. One year ago at this time, the 15-year FRM averaged 3.4%.
Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.52% this week, up from last week when it averaged 3.46%. A year ago, the 5-year ARM averaged 3.2%.
Kiefer said that while interest rates are rising, it doesn’t appear to be denting home sales, at least not yet.
“The release of the December existing home sales data confirms that 2017 was the best year for home sales in over a decade,” Kiefer said. “Will 2018 home sales outpace 2017? Homebuyer affordability will be a challenge, with mortgage rates moving higher and robust house price gains across the country. The FHFA reported that house prices increased 6.5%from November 2016 to November 2017, with all regions showing positive 12-month changes.”