Mortgage rates moved higher for the second week in a row as financial markets leveled off after a rocky start to the summer.
Brexit anxieties appear to be easing. Long-term bond yields are rising. And the real-estate market received some good news earlier this week. Housing starts rose 4.8 percent, showing a solid demand for new homes.
As a result, home loan rates are starting to creep up, though they remain close to historic lows.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly half of the experts it surveyed believe rates will hold steady in the coming week as the markets await next week’s Federal Reserve meeting.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.45 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.42 percent a week ago and 4.04 percent a year ago. The 30-year fixed rate hasn’t risen above 3.5 percent in a month.
The 15-year fixed-rate average grew to 2.75 percent with an average 0.5 point. It was 2.72 percent a week ago and 3.21 percent a year ago.
The five-year adjustable rate average rose to 2.78 percent with an average 0.5 point. It was 2.76 percent a week ago and 2.97 percent a year ago.
“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their record (10-year Treasury yield) and near-record (30-year mortgage rate) lows,” Sean Becketti, Freddie Mac chief economist, said in a statement. “With the Federal Reserve on hold and the UK monetary authority taking at least a one-month breather, we don’t expect any significant movement in mortgage rates in the near-term.”
Meanwhile, mortgage applications decreased this week, according to the latest data from the Mortgage Bankers Association.
The market composite index - a measure of total loan application volume – fell 1.3 percent from the previous week. The refinance index dropped 1 percent, while the purchase index declined 2 percent.
The refinance share of mortgage activity accounted for 64.2 percent of all applications.
(c) 2016, The Washington Post · Kathy Orton