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Mortgage Rates Continue Upward Trend

The expectation on future hikes by the Federal Reserve as well as increased borrowing by the U.S. Treasury drove mortgage interests up according to the Primary Mortgage Market Survey that was released by Freddie Mac on Thursday.

According to the survey, the 30-year fixed rate mortgage rose 27 basis points from the first week of 2018 to 4.22 percent, which is slightly above the same period last year when it averaged 4.19 percent. This was the fourth consecutive week that saw interest rates rising.

The results of the Primary Mortgage Market Survey are based on Freddie Mac’s survey of lenders on the rates and points for their most popular 30-year fixed-rate, 15-year fixed-rate and 5/1 hybrid amortizing adjustable-rate mortgage products. The survey is based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent.

“ The Federal Reserve did not hike rates this week, but the market views future hikes as a certainty.” said Len Kiefer, Deputy Chief Economist at Freddie Mac. “The expectation of future Fed hikes and increased borrowing by the U.S. Treasury is putting upward pressure on interest rates.”

The survey indicated that the 15-year fixed rate mortgage rose 0.5 points over last week averaging 3.68 percent. The rates had averaged 3.62 percent last week. The 15-year fixed rate mortgage had averaged 3.41 percent at the same time last year.

The survey also indexes, the adjustable-rate mortgage (ARM) products to U.S. Treasury yields and lenders are asked for both the initial coupon rate and points as well as the margin on the ARM products.

According to the survey, five-year (ARM) averaged 3.53 percent during the week and was up 0.4 points from a week ago when it averaged 3.52 percent, the survey said. A year ago at this time, the five-year ARM averaged 3.23 percent.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.

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