Much of the commentary surrounding the Federal Reserve's decision Wednesday to raise the Fed Funds rate by 25 basis points has been about how this is likely to increase mortgage rates, have a negative effect on home affordability, and potentially derail the still-wobbly recovery of the U.S. housing market.
Freddie Mac publishes a weekly survey that's generally regarded as the final word in long-term mortgage rate tracking. "Increasing inflation, continued gains in the labor market and the Fed's intentions for further rate increases - all three will keep pushing mortgage rates up this year".
According to the MBA, last week's average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.36% to 4.46%, its highest level since April 2014.
Total mortgage application volume rose 3.1 percent last week from the previous week. That is comforting to long-term bond investors and potentially good news for mortgage rates.
Mortgage rates jumped for a second straight week and hit new highs for the year as borrowing costs for homebuyers rise.
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A year ago at this time, the 30-year and 15-year fixed-rate mortgages averaged a respective 3.73% and 2.99%. This information is based on a survey conducted by Freddie's that was announced on Wednesday.
For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/finance/mortgages/mortgage-analysis-031517.aspx.
This will happen partly just due to higher mortgage interest rates, which will provide a bit of a cushion for lenders to take on a little more risk.
"Our survey data shows that mortgage rates would have to be significantly higher to have any meaningful impact". Most economists continue to predict that rates will remain below 5 percent through 2017. Four weeks ago, the rate was at an average 4.35 percent. With coverage of over 600 local markets, Bankrate generates rate tables in all 50 USA states. As such, today's rates are still the lowest in more than a week!