Last week, we saw mortgage rates at the highest levels in the last 7 weeks. However, it’s still lower than where we started at the beginning of this year.
Here is what Freddie Mac reported in its latest Primary Mortgage Market Survey (PMMS):
30-year<> fixed-rate mortgages (FRM) averaged 4.37 percent with an average 0.6 point for the week ending March 13, 2014, up from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 3.63 percent.
15-year FRM this week averaged 3.38 percent with an average 0.6 point, up from last week when it averaged 3.32 percent. A year ago at this time, the 15-year FRM averaged 2.79 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.09 percent this week with an average 0.4 point, up from last week when it averaged 3.03 percent. A year ago, the 5-year ARM averaged 2.61 percent.
1-year Treasury-indexed ARM averaged 2.48 percent this week with an average 0.4 point, down from last week when it averaged 2.52 percent. At this time last year, the 1-year ARM averaged 2.64 percent.
Mortgage rates have been volatile over last 2 weeks. First it went up on the employment report news. The economy added 175,000 jobs in February, which was above the market consensus forecast. Meanwhile, the unemployment rate nudged up to 6.7 percent, the first rate increase in over a year. But the Crimean crisis in Ukraine and slower growth in China kept a leash on further worsening of rates. So while day-to-day volatility has been high, at a macro level the rates are mostly flat. In fact, Freddie Mac reported 4.37% as the average rate for 30 year fixed three weeks back – exactly the same rate as last week.
At the beginning of the year, 30 Year Fixed rate was 4.53%. So, we are still 16 bps lower than that. It’s an encouraging sign given the fact the experts were predicting that rates would rise through the year. Lower rates are attributed to slower than expected economic growth so far this year.
Outlook for Rates: with the Fed expected to taper bond purchase again and Crimea crisis not turning into a military conflict (yet), the rate will most likely continue to inch up. Next 2 weeks could see rates going up by .125% to 0.25% before the next month’s employment report are out on April 4th, 2014.
Amazon.com Best-selling author, Shashank Shekhar (NMLS 8176) is a mortgage lender with Arcus Lending, offering loans for home purchase and refinance. Shashank has been featured as a mortgage expert on Yahoo! News, ABC, CBS, NBC and FOX. He has been named "Top 40 under 40" most influential mortgage professionals in the country.
