Freddie Mac’s latest Primary Mortgage Market Survey shows that the 30-year fixed rate mortgage rose to 3.56%.
Despite the increase, this is the first time the 30-year fixed rate mortgages have been under 3.6% for more than four-consecutive weeks since Q4 2016.
“Pipeline purchase demand continues to improve heading into the late fall with purchase mortgage applications up nine percent from a year ago. The improved demand reflects the still healthy underlying consumer economic fundamentals such as a low unemployment rate, solid wage growth and low mortgage rates, said Sam Khater, Freddie Mac’s Chief Economist said. “While there has been a material weakness in manufacturing and consistent trade uncertainty, so far, the American consumer has proved to be resilient with solid home purchase demand.”
The 30-year fixed rate mortgage rose just 0.5 points for the week ending September 12, which is still below last year’s 4.6% rate.
Average rates for 15-year fixed rate mortgages only by .09 points points 3.09%. The 15-year fixed rate mortgage at this time last year was 4.06%.
Although the rate rose this week, Fannie Mae revealed that its Q3 2019 Mortgage Lender Sentiment Survey reported the net profit margin for mortgage lenders hit a new high, due to strong mortgage demand expectations.
"Lender profitability sentiment hit a survey high this quarter, despite the movement of credit standards from net easing to net tightening," said Fannie Mae SVP and Chief Economist Doug Duncan. "Lenders attributed their upbeat profitability outlook to consumer demand and operational efficiency. Many lenders pointed to declining interest rates as the engine behind consumer demand, particularly for refinance mortgages. Together, the results suggest that lenders’ positive profitability outlook is being driven primarily by business fundamentals, not by lowered credit standards."
The survey found that the volume of lenders who anticipate profit margins being positive rose from 29% in Q2 2019 to 40% in Q3 2019. The index had been in the negative from Q4 2016 to Q1 2019, dipping as low as -34% in Q4 2018. The index was 11% in Q3 2016.