Mortgage rates have risen for the third week in a row, according to the Primary Mortgage Market Survey [1] from Freddie Mac. [2] According to the Survey, mortgage rates hit a high “not seen in over a month” last week.
The 30-year fixed rate mortgage (FRM) is up from last week’s 4.54 percent, now at 4.60 percent with an average 0.5 point. This time last year, the 30-year FRM averaged 3.78 percent.
15-year fixed jumped week over week as well, from 3.99 percent last week to 4.06 percent with an average 0.5 point this week. A year ago at this time, the 15-year FRM averaged 3.08 percent.
According to Freddie Mac Chief Economist Sam Khater, these high mortgage rates, the highest since August 2, are due to a “one-two punch” from strong job and consumer credit growth.
“Mortgage rates are currently 0.82 percent higher than a year ago, which is the biggest year-over-year increase since May 2014,” said Khater. “Looking ahead, annualized comparisons for mortgage applications may look weaker than they appear, but that’s primarily because of the large spread between mortgage rates now and last September, which was when they reached their low for the year.”
Added Khater, “Overall, this spectacular stretch of solid job gains and low unemployment should help keep homebuyer interest elevated. However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month and at future meetings.”
According to Danielle Hale, Chief Economist for Realtor.com [3], commented on Freddie mac’s data, noting that increasing rates may impact price growth.
“Looking forward, increasing mortgage rates will continue to erode home buying power and will undoubtedly contribute to a further slowdown in price growth,” said Hale. “We have already seen a tapering in August which saw a 7 percent increase in median listing prices, down from 10 percent a year ago.”