The 30-year fixed mortgage rate increased again this week, marking the eighth consecutive week that these rates have seen a rise according to the latest Primary Mortgage Market survey by Freddie Mac. The survey indicated that the 30-year fixed-rate mortgage averaged 4.43 percent for the week ending March 1 up from last week’s 4.40 percent. A year ago at this time, the rate averaged 4.10 percent, the survey said.
The survey found that the 15-year fixed mortgage rate averaged 3.90 percent during the week, up 0.5 points from last week when it averaged 3.85 percent and the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.62 percent this week, down 0.4 points from its average of 3.65 percent last week.
Attributing the rate climb to the Treasury-yields that have also seen a steady climb, Len Keifer, Deputy Chief Economist at Freddie Mac said, “Optimistic testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell sent Treasury yields higher as Powell stated his outlook for the economy has strengthened since December. The 30-year rate has been on a tear in 2018, climbing 48 basis points since the start of the year and increasing for eight consecutive weeks.”
Keifer was optimistic about the housing market though. “As we documented, historically when mortgage rates surge, housing swoons. But we think the strength in the economy and pent-up housing demand should allow U.S. housing markets to post modest growth this year even with higher mortgage rates. We really have to wait for housing markets to heat up in spring, but early indications are that housing demand remains robust to these rate increases.”
Not everyone is very optimistic though. “This year’s overall trend of rising mortgage rates paired with escalating home prices is going to make affordability even tougher this spring,” said Javier Vivas, Director of Economic Research for Realtor.com. “First time buyers are going to have an especially hard time because they typically have less cash available for buying down interest rates or increasing a down payment.”