Mortgage Rates Climb Higher

Fixed rate mortgages rose for the third-consecutive week, according to Wednesday’s Freddie Mac’s Primary Mortgage Market Survey (PMMS).

“After dropping dramatically in late March, mortgage rates have modestly increased since then. While this week marks the third-consecutive week of rises, purchase activity reached a nine-year high—indicative of a strong spring homebuying season,” said Sam Khater, Freddie Mac’s Chief Economist.

The 30-year fixed-rate mortgages (FRM) declined to 4.06% in March, compared to 4.28 percent last week. The 15-year fixed-rate mortgage last month averaged 3.5%, which was down from the previously reported figure of 3.71%.

The 30-year FRM rose to 4.17% with an average 0.5 point for the week ending April 18—a small increase from the prior week’s 4.1%. The 30-year FRM averaged 4.47 percent this time last year.

The 15-year FRM increased from 3.60% to 3.62% with an average 0.5 point. Both figures are lower than the 3.94% reported a year ago at this time.

Five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) continues to surpass last year’s rate of 3.6%. The PMMS reported the ARM averaged 3.78% with an average 0.3 point this week, which is a small decrease from 3.80% the week prior.

Khater said last month that he expects "mortgage rates to remain low, in line with the low 10-year treasury yields, boosting homebuyer demand in the next few months."

Fluctuating mortgage rates aren’t scaring away homebuyers, as mortgage applications to purchase a home rose 1% last week from the previous week and were 7% higher than a year ago, according to CNBC. Purchase applications reached their highest level since April 2010.

CNBC also speculated that rates are rising due to concerns of economies overseas.