Thirty-year fixed mortgage rates on average hit a year-high this week ahead of the Federal Reserve’s decision on the key interest rate, increasing to 4.21 percent, according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®). Fifteen-year mortgage rates, at the same time, increased to 3.42 percent, while 5-year Treasury-indexed hybrid adjustable mortgage rates increased to 3.23 percent.
Mortgage rates and the Treasury yield have uncharacteristically diverged in recent weeks—a trend that now appears to be reversing, says Sean Becketti, chief economist at Freddie Mac.
“The 10-year Treasury yield rose about 10 basis points this week,” Becketti says. “For the first time in weeks, the 30-year mortgage rate moved with Treasury yields and jumped 11 basis points to 4.21 percent. The strength of Friday’s employment report and the outcome of next week’s [Federal Open Market Committee] meeting are likely to set the direction of next week’s survey rate.”
Source: Freddie Mac
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