Mortgage rates climbed for the third consecutive week, according to the latest survey by mortgage buyer Freddie Mac. The average for a 30-year fixed-rate mortgage now hovers a quarter percentage point higher than it did at the beginning of the month.
The average rate on a 30-year fixed-rate loan climbed to 3.59% this week, up 0.08% from a week ago. Prior to last week’s climb to 3.51%, the 30-year fixed had remained below the 3.5% threshold for more than a month. However, the average is still well below the average rate from a year ago, 3.78%.
Likewise, the average rate on a 15-year fixed loan also jumped for the third week running, climbing to 2.77% from 2.69% a week ago. It is the second consecutive rise for the 15-year fixed-rate mortgage after hitting a historic low of 2.56% in early May. Despite the climb, the 15-year is still down significantly from the 3.04% rate it was at a year ago.
In contrast to the fixed-rate loans, hybrid adjustable-rate mortgages held steady for the most part. The average rate on a 5-year ARM rose ever-so-slightly, climbing from 2.62% to 2.63% week-over-week. The average rate on a 1-year ARM remained static at 2.55%.
“While [higher rates] may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks,” commented Freddie Mac vice president and chief economist Frank E. Nothaft.
“For instance, in April, single family housing permits rose to the strongest pace since May 2008 while existing home sales for the same month grew the most since November 2009. Moreover, the National Association of Realtors reported that the median number of days on the market for these sales fell from 62 to 46 days, the fewest since it began collecting the data in May 2011.”
Buyer affordability was apparent in this morning’s New Home Sales date released for April, which showed a 2.3% increase in sales of newly constructed homes, according to mortgage expert Al Bowman: “This was a little larger increase than analysts were expecting to see, but not enough of a variance to cause much concern or excitement. The number of sales was much higher than forecasted however, a sizable upward revision to March’s sales means the monthly change wasn’t far off from expectations.”
Looking ahead, the upward trending of mortgage rates are expected to cool. In the latest Mortgage Rate Trend Index by Bankrate.com, 77% of the panelists believe mortgage rates will either fall or remain unchanged over the next week. “Following all the volatility we have seen in the last few weeks, look for rates to recover and improve slightly,” said FBC mortgage planner Jim Sahnger.