Fixed rate mortgages rose for the third-consecutive week, according to Wednesday’s Freddie Mac’s [1]Primary Mortgage Market Survey [2] (PMMS).
“After dropping dramatically in late March [3], 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 [4] 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 [5]. Purchase applications reached their highest level since April 2010.
CNBC also speculated that rates are rising due to concerns of economies overseas.