Last month’s historic Brexit vote drove mortgage rates down near historic lows and brought a flurry of refinancing activity. According to Freddie Mac, however, the volatility in the mortgage market brought on by Brexit is tapering off and interest rates are recovering.
According to Freddie Mac’s latest Primary Mortgage Market Survey released Thursday, the average 30-year fixed-rate mortgage for the week ending July 21, 2016, was 3.45 percent, up 3 basis points from a week earlier. While on the way up (having ticked up by 4 basis points in the last 2 weeks), the average 30-year FRM is still only 14 basis points above the record low of 3.31 percent set in 2012.
Last year at this time, the average 30-year FRM was still above 4 percent (4.04).
Meanwhile, the 15-year FRM averaged 2.75 with an average 0.5 point up for the week ending July 21, also up 3 basis points from the previous week’s average of 2.72 percent. The 15-year FRM averaged 3.21 percent at this time last year.
All of this means that the already low mortgage rates will likely stay low for a while, according to Freddie Mac.
“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their record (10-year Treasury yield) and near-record (30-year mortgage rate) lows,” said Sean Becketti, Chief Economist with Freddie Mac. “This week, the 30-year fixed mortgage rate increased 3 basis points to a still-quite-low 3.45 percent. With the Federal Reserve on hold and the UK monetary authority taking at least a one-month breather, we don't expect any significant movement in mortgage rates in the near-term. This summer remains an auspicious time to buy a home or to refinance an existing mortgage.”
The boom in the number of mortgage applications that occurred immediately following Brexit is over; for the week ending July 15, the Mortgage Bankers Association reported a 1.3 percent decline in the number of mortgage apps from a week earlier.