Mortgage rates in the US continue to rise
Mortgage rates in the United States have increased this week as well. Rates have been increasing since the last 5 weeks. On Thursday, Freddie Mac, revealed that the 30 year fixed rate average increased to 4.32 percent. A week ago, it was at 4.22 percent and last year it was 4.17 percent. Since the start of 2018, the 30 year fixed rate has shot up by at least 40 points which is the highest since December 2016. Furthermore, the 15 year fixed rate average increased to 3.77 percent. A week ago, it was at 3.68 percent and a year ago it was at 3.39 percent. The 5 year adjustable rate average climbed to 3.57 percent. Last week it was 3.53 percent whereas a year ago the 5 year adjustable rate average was 3.21 percent. In a statement, Aaron Terrazas, Zillow’s senior economist said that last week, there was in increase in the mortgage rates. The increase was prompted by sell-offs in stock market. He added that world’s leading central banks will increase the interest rates. Terrazas also said that political insecurity is likely to decline in the coming weeks as congressional representatives have already agreed on the 2 year budget. However, he said that financial market instability will remain.
Long-term bond yields and mortgage rates usually follow the similar path. Long term bond yields have been progressively increasing. Since the start of 2018, there has been a 40 basis points increase in the yield of 10 year Treasury bonds. It was further revealed by Bankrate.com that most of the experts believe rates will keep on rising in the coming weeks. The branch manager of Sierra Pacific Mortgage, Michael Becker is one expert who believes rates will climb up. In his statement, Becker said that the sell-off in equity markets supported a swift decline in mortgage rates. He added, that fears of a rise in inflation rate will push mortgage rates higher in the weeks to come.
According to Mortgage Bankers Association’s data, last week mortgage application were uniform. However, there was an increase of 0.7 percent in the market composite index.