The average 30-year, fixed mortgage rate stayed still this week, inching up to 4.45 percent from 4.44 percent the week prior, according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®). The average 30-year, fixed rate has been rapidly rising since the start of the year.
On Wednesday, the Federal Reserve increased its interest rate, denoting the first of an expected three raises this year. Although mortgage rates are moved by Treasury yields, a Fed increase can affect borrowing costs.
“The Federal Reserve raised interest rates —a much-anticipated move that comes as both U.S. and global economic fundamentals continue to strengthen,” says Len Kiefer, deputy chief economist at Freddie Mac. “The Fed’s decision to raise interest rates by a quarter of a percentage point puts the federal funds rate at its highest level since 2008. The decision, while widely expected, sent the yield on the benchmark 10-year Treasury soaring. Following Treasurys, mortgage rates shrugged off last week’s drop and continued their upward march. The U.S. weekly average 30-year fixed mortgage rate rose one basis point to 4.45 percent in this week’s survey.”
The average 15-year, fixed mortgage rate was 3.91 percent this week, up from 3.90 percent the week prior, according to the PMMS. The average five-year, Treasury-indexed hybrid adjustable rate was 3.68 percent, up from 3.67 percent.
Affordability is becoming challenged even more so now that rates are rising, but, generally, housing is responding well, according to Kiefer.
“So far, U.S. housing markets remain resilient in the face of higher mortgage rates,” Kiefer says. “The National Association of REALTORS® (NAR) reported this week that existing-home sales in February increased 3 percent month-over-month on a seasonally adjusted basis and are up 1.1 percent from a year ago. That momentum is carrying through into spring. In the latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey, the home purchase mortgage applications index was up 6 percent from the same week a year ago.”
Stay tuned to RISMedia more developments.
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