Mortgage Rates Approach 5 Percent

first_img After rising for two consecutive weeks, mortgage rates approached the 5 percent mark during the week, rising 19 basis points to 4.9 percent according to the latest Freddie Mac Primary Mortgage Markets survey released on Thursday. With this increase, Freddie Mac said that rates had risen to their highest point in seven years.While the 30-year fixed rate mortgage increased from 4.7 percent last week to 4.9 percent, it had averaged 3.91 percent during the same period last year. The survey revealed that the 15-year fixed-rate mortgage also rose from 4.15 percent last week to 4.29 percent and had stood at 3.21 percent during the same period in 2017.Similarly, the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) rose to 4.07 percent from 4.01 percent. The rate had averaged 3.16 percent during the same time last year.Looking at the macro trends that impacted mortgage rates this week, Danielle Hale, Chief Economist, said that the jump was the result of investors being prompted by inflation concerns and the strong jobs report to demand higher rates to compensate for the lower value of future dollars.In terms of the impact of this rise on the housing market, Sam Khater, Chief Economist, Freddie Mac said that rising rates along with high and escalating home prices were “putting downward pressure on purchase demand.”According to Khater, “While the monthly payment remains affordable due to the still low mortgage rate environment, the primary hurdle for many borrowers today is the down payment and that is the reason home sales have decreased in many high-priced markets.”However, with the rates approaching the 5 percent mark, Hale said that  though a 5 percent mortgage rate was historically low, crossing this threshold could have a ‘sticker shock effect’ on some buyers currently in the market. “We could see some buyers, especially first timers, leave the market next week as a result,” Hale predicted. Mortgage Rates Approach 5 Percent October 11, 2018 484 Views Freddie Mac Homebuyers HOUSING loans Mortgage Rates 2018-10-11 Radhika Ojhacenter_img in Daily Dose, Featured, News, Origination Sharelast_img read more

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