Mortgage rates rise for the third consecutive week – Chicago Tribune

Mortgage rates moved higher for the third week in a row.

Mortgage rates moved higher for the third week in a row.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average rose to 4.15 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.04 percent a week ago and 4.19 percent a year ago. The 30-year fixed-rate is at its highest level in 10 months.

The 15-year fixed-rate average jumped to 3.62 percent with an average 0.5 point. It was 3.49 percent a week ago and 3.40 percent a year ago. The five-year adjustable rate average climbed to 3.52 percent with an average 0.4 point. It was 3.46 percent a week ago and 3.20 percent a year ago.

“Mortgage rates have increased decisively in two of the past three weeks, touching their highest levels since March 2017 last week, and the long-term momentum is clearly upward,” said Aaron Terrazas, senior economist at Zillow. “Some of the increase reported late last week may have been associated with the federal government shutdown over the weekend that extended into Monday, which has now been temporarily resolved. Friday’s [fourth quarter] GDP numbers are the most important economic data scheduled for release this week, but markets could also move if ongoing NAFTA negotiations turn sour.”

The yield on the 10-year Treasury escalated to 2.66 percent Monday and has risen 20 basis points since the start of the year. (A basis point is 0.01 percentage point.) Because mortgage rates tend to follow the same path as long-term bond yields, home loan rates also increased.

“The 10-year Treasury yield reached its highest point since 2014 reflecting expectations of broad-based economic growth,” Len Kiefer, deputy chief economist at Freddie Mac said in a statement. “Mortgage rates, in turn, followed the surge in Treasury yields. The 30-year fixed rate mortgage jumped 11 basis points to 4.15 percent, its highest level since March of last year.”

Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half of the experts it surveyed say rates will increase in the coming week. Brett Sinnott, vice president of capital markets at CMG Financial, is one who predicts rates will continue rising.

“We are finally starting to see some movement in bonds, which has caused interest rates to [move] higher over the past couple of weeks,” Sinnott said. “Tax reform practices are starting to take shape as businesses and individuals have begun assimilating to the new changes. The U.S. dollar has seen volatility over the past week, which has also contributed to movement across several markets.”

The refinance share of mortgage activity accounted for 49.4 percent of all applications.

“A combination of being left on the sideline last summer due to a lack of inventory for sale and the prospect of slowly rising interest rates over the near term appears to have buyers in a hurry to start the spring buying season,” said Lynn Fisher, MBA vice president of research and economics.

Source: Mortgage rates rise for the third consecutive week – Chicago Tribune

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