Home >> Daily Dose >> Mortgage Rates Reverse Course
Print This Post Print This Post

Mortgage Rates Reverse Course

Close-up Of Wooden Seesaw Showing Balance Between Percentage Symbol And House Model

The 30-year fixed rate mortgage recorded its largest weekly increase since October 2018, as it grew to 3.73% in the latest Primary Mortgage Market Survey from Freddie Mac.

“Despite the rise in mortgage rates, economic data improved this week—particularly housing activity, which gained momentum with a noticeable rise in purchase demand and new construction,” said Sam Khater, Freddie Mac’s Chief Economist. “Homebuyers flocked to lenders with purchase applications, which were up 15% from a year ago and residential construction permits increased twelve percent from a year ago to 1.4 million, the highest level in twelve years. While there was initially a slow response to the overall lower mortgage rate environment this year, it is clear that the housing market is finally improving due to the strong labor market and low mortgage rates.”

Freddie Mac reports the 30-year fixed rate mortgage rose from 3.56% from the week prior. The 30-year fixed rate mortgage was 4.65% this time last year. 

Additionally, the 15-year fixed rate mortgage averaged 3.21%, which is an increase from last week’s 3.09%.

“Mortgage rates rose this week, as investors reacted to mixed market signals, including the Fed’s short term rate cut, rising homebuilder confidence, higher retail spending and a sharp uptick in new construction,” said realtor.com’s Senior Economist George Ratiu. “The U.S. economy continues to show signs of upward momentum, at a time when global activity moderates.”

Ratiu said with mortgage rates more than 90 basis points below levels from a year ago, consumers are saving around $70 per month on mortgage payments. He added the inventory remains limited and makes the market difficult for young and entry-level buyers, however the fall season usually offers less competition and more price reductions.  

“For patient buyers, the upcoming weeks may provide the right mix of inventory, price and mortgage rates for a successful purchase,” Ratiu said. 

Despite the increase in rates, CoreLogic recently announced that the typical mortgage payments fell 6.1%. 

The typical mortgage payment had increased annually every month for the past three years, it had its first decline in May, when it fell around 3%. Median sale prices in June 2018 were up 5% annually and the typical mortgage payment was 14% higher than the prior year due to a 0.7% increase in mortgages rates from 2017.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
x

Check Also

Coalition to Stop Real Estate Wire Fraud & Qualia Partner

Founded by the American Land Title Association, the Coalition provides education about the growing threat of these scams and offers tips to help consumers protect their money during the homebuying process.

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.