Investor optimism may support an increase in borrowing costs in coming weeks
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Mortgage rates rose marginally during the period ending Sept. 6, ticking up for the second consecutive period, according to the Primary Mortgage Market Survey released by Freddie Mac.
Rates for the 30-year fixed-rate mortgage averaged 4.54%, with an average 0.5 point, an increase from the previous average of 4.52%. The latest average also marks an increase from the year-ago average of 3.78%.
The 15-year fixed-rate mortgage averaged 3.99%, with an average 0.4 point, up from 3.97%. A year ago at this time, the mortgage averaged 3.08%.
The average rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 3.93%, with an average 0.3 point, from last 3.85%. The 5-year ARM averaged 3.15% in the same period in 2017.
“Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy,” Freddie Mac Chief Economist Sam Khater said. “It’s important to note that rates are now up three-quarters of a percentage point from last year and home prices – albeit at a slower pace – are still outrunning rising inflation and incomes.”
Despite the strong economy bringing interested buyers into the market, Khater said weakening affordability is hindering many of them from buying this fall. “The good news is that purchase mortgage applications have recently rebounded to above year-ago levels,” he said.
