Mortgage rates again moved up this week, continuing an uptrend, with the average 30-year, fixed rate at 4.43 percent, according to Freddie Mac’s recently released Primary Mortgage Market Survey® (PMMS®). The average 30-year, fixed rate was 4.40 percent the week prior. The average 15-year, fixed rate this week is 3.90 percent, while the average five year, Treasury-indexed hybrid adjustable rate is 3.62 percent.
Mortgage rates are moved, primarily, by 10-year Treasury yields.
“Optimistic testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell sent Treasury yields higher as Powell stated his outlook for the economy has strengthened since December,” says Len Kiefer, deputy chief economist at Freddie Mac. “Following Treasuries, the 30-year fixed mortgage rate jumped three basis points to reach 4.43 percent in this week’s survey. The 30-year rate has been on a tear in 2018, climbing 48 basis points since the start of the year and increasing for eight consecutive weeks.”
Housing has begun to feel the impact of higher mortgage rates, with existing and pending home sales in January tumbling.
“As we documented, historically when mortgage rates surge, housing swoons,” Kiefer says, “but we think strength in the economy and pent-up housing demand should allow U.S. housing markets to post modest growth this year even with higher mortgage rates. We really have to wait for housing markets to heat up in spring, but early indications are that housing demand remains robust to these rate increases.”
Source: Freddie Mac
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