Mortgage rates moved higher this week for the first time in more than a month.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.41 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.35 percent a week ago and 4.46 percent a year ago.
The 15-year fixed-rate average rose to 3.83 percent with an average 0.4 point. It was 3.77 percent a week ago and 3.94 percent a year ago. The five-year adjustable rate average increased to 3.87 percent with an average 0.3 point. It was 3.84 percent a week ago and 3.63 percent a year ago.
“Taken together, the releases offered evidence that the economy remains on good, if not strong, footing and prompted [long-term U.S. Treasury] yields to trend higher for the better part of two days,” Speakman said. “Since then, however, this enthusiasm has tapered. Mixed messages on the advancements of U.S.-China trade negotiations have resulted in only mild rate fluctuations as markets await more definite signals from the meetings.”
The yield on the 10-year bond jumped from 2.64 percent on Feb. 26 to 2.76 on March 1, an increase of 12 basis points in less than a week. (A basis point is 0.01 percentage point.) But following the sharp increase, yields fell back to 2.69 percent on Wednesday.
Where mortgage rates are headed could depend on Friday’s closely watched employment report. Bankrate.com, which puts out a weekly mortgage rate trend index, found that half of the experts it surveyed say rates will remain relatively stable in the coming week. Elizabeth Rose, branch manager at Movement Mortgage, is one who predicts rates will hold steady.
“Mortgage rates are making a persistent move back to the range of prior weeks which, if it holds, could result in slightly improved rates," Rose said. “On the other hand, the jobs report is due Friday, which is an important report and always has potential to move interest rates either direction in a quick second.”
The employment report is why Michael Becker, branch manager at Sierra Pacific Mortgage, is expecting rates to go up.
“That report has sent mortgage rates higher the last two months, so I expect the same to happen this week and mortgage rates to rise after Friday,” Becker said.
Meanwhile, with rates increasing mortgage applications took a step back this week, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — decreased 2.5 percent from a week earlier. The refinance index fell 2 percent from the previous week, while the purchase index dropped 3 percent.
The refinance share of mortgage activity accounted for 40 percent of all applications.
“Despite the weekly decline, purchase activity did muster a small gain of 1 percent compared to a year ago, and the average conventional loan amount reached a new high of $352,900,” said Bob Broeksmit, MBA president and CEO. “With housing supply more plentiful at the upper end of the market, move-up buyers are active this spring and are in a good position to find a home and sell their current one, likely to a first-time buyer. A faster pace of housing stock turnover would lead to more sales in the coming months.”
The MBA also released its mortgage credit availability index (MCAI) this week that showed credit availability increased in February. The MCAI rose 0.6 percent to 180.1 last month. An increase in the MCAI indicates that lending standards are loosening, while a decline signals that they are tightening.
“Credit availability increased in February as a result of new jumbo offerings brought to the market, both for agency jumbo and non-agency jumbo programs,” Mike Fratantoni, MBA chief economist, said in a statement. “We also saw some expansion in credit for borrowers with lower credit scores and higher [loan-to-value ratios], although credit availability for government programs remains tighter following the scaling back of VA refinance program.”
More Real Estate: