April 12th, 2019
Mortgage rates are starting to crawl back up after falling to 14-month lows.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average increased to 4.12 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 4.08 percent a week ago and 4.42 percent a year ago.
The 15-year fixed-rate average also moved higher to 3.6 percent with an average 0.4 point. It was 3.56 percent a week ago and 3.87 percent a year ago. The five-year adjustable rate average jumped to 3.8 percent with an average 0.4 point. It was 3.66 percent a week ago and 3.61 percent a year ago.
“Despite the recent rise, we expect mortgage rates to remain low, in line with 10-year Treasury yields,” said Sam Khater, Freddie Mac’s chief economist, in a statement.
The 10-year Treasury yield has hovered around 2.5 percent since the start of the month.
The upturn in mortgage rates comes in the face of recent economic news that typically keeps home loan rates in check. Friday’s employment report showed wage growth had slowed. The consumer price index for March, which was released this week, saw its biggest jump in 14 months, but core CPI fell to its lowest level in a year. And the Federal Reserve released the minutes from its March meeting, which reinforced the position that central bank officials expect economic growth to be slower than it was last year and are unlikely to raise the benchmark rate.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed say rates will remain relatively stable in the coming week. Les Parker, senior vice president of LoanLogics, disagrees. He points to the symbiotic relationship between oil and the U.S. dollar.
“When markets are calm, oil and the dollar tend to trade inversely,” Parker said. “If the dollar takes off and oil falls, then mortgage rates will fall.”
Meanwhile, rising rates caused mortgage applications to pull back. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — decreased 5.6 percent from a week earlier. The refinance index fell 11 percent from the previous week, while the purchase index ticked up 1 percent.
The refinance share of mortgage activity accounted for 44.1 percent of all applications.
“The combination of slowly rising inventory and more favorable affordability conditions continues to provide a solid boost to the housing market,” said Bob Broeksmit, MBA president and CEO. “Purchase applications last week were 13 percent higher than a year ago and have now increased year-over-year for two straight months.”