Mortgage rates slightly increased after dropping last week for the first time in more than two months, however, they could soon begin their upward climb once again, according to Freddie Mac’s Primary Mortgage Market Survey.
“The Federal Reserve raised interest rates [Wednesday] – a much-anticipated move that comes as both U.S. and global economic fundamentals continue to strengthen,” said Len Kiefer, Freddie Mac deputy chief economist. “The Fed’s decision to raise interest rates by a quarter of a percentage point puts the federal funds rate at its highest level since 2008.”
“The decision, while widely expected, sent the yield on the benchmark 10-year Treasury soaring,” Kiefer said. “Following Treasuries, mortgage rates shrugged off last week’s drop and continued their upward march. The U.S. weekly average 30-year fixed mortgage rate rose one basis point to 4.45% in this week’s survey.”
Because mortgage interest rates typically follow the general pattern of the 10-year Treasury yield, the 30-year mortgage rate could soon see a surge.
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(Source: Freddie Mac)
The 30-year fixed-rate mortgage increased to 4.45% for the week ending March 22, 2018. This is up just slightly from last week’s 4.44%, and up from 4.23% last year.
The 15-year FRM also increased slightly, rising from 3.9% last week and 3.44% last year to 3.91% this week.
The five-year Treasury-indexed hybrid adjustable-rate mortgage increased to 3.68%, up from last week’s 3.67% and from 3.24% last year.
“So far, U.S. housing markets remain resilient in the face of higher mortgage rates,” Kiefer said. “The National Association of Realtors reported this week that existing home sales in February increased 3% month-over-month on a seasonally adjusted basis and are up 1.1% from a year ago.”
“That momentum is carrying through into spring,” he said. “In the latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey, the home purchase mortgage applications index was up 6% from the same week a year ago.”