Mortgage rates continued to head back up this week, pushed higher by positive economic news out of China.
According to the latest data, released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.17 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 4.12 percent a week ago and 4.47 percent a year ago.
The 15-year fixed-rate average ticked up to 3.62 percent with an average 0.5 point. It was 3.6 percent a week ago and 3.94 percent a year ago. The five-year adjustable rate average slipped to 3.78 percent with an average 0.3 point. It was 3.8 percent a week ago and 3.67 percent a year ago.
“Mortgage rates rose this week, riding strong Chinese economic data to their highest levels in almost a month,” said Matthew Speakman, a Zillow economic analyst. “Weak data and concerns over slowing growth in China and Europe have been central to the patient economic approach taken by the Federal Reserve in recent months. But recent releases showing encouraging trends in Chinese lending, trade and economic growth after months of weakness emboldened markets to pursue riskier assets, pushing bond yields and mortgage rates upwards.”
The 30-year fixed rate has moved higher three weeks in a row but still remains below where it was at the end of March. Speakman said modest increases could continue if favorable economic news persists, but he doesn’t expect rates to take off in the near future.
“Without evidence of a meaningful uptick in U.S. inflation, it is unlikely that mortgage rates will see any substantial increases anytime soon,” Speakman said.
“Recent positive economic data has put pressure on mortgage bonds, pushing rates slightly higher,” said Elizabeth Rose, certified mortgage planner with AmCap Home Loans. “There is always the potential for this good news to continue to lead to higher rates. However, mortgage bonds are sitting slightly above a support level that has held for many months. Retail sales and housing data could impact the market this week, however I anticipate current support levels will hold, and mortgage rates remain relatively steady in the coming week.”
Meanwhile, rising rates caused mortgage applications to retreat again this week. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — decreased 3.5 percent from a week earlier. The refinance index fell 8 percent from the previous week, while the purchase index ticked up 1 percent.
The refinance share of mortgage activity accounted for 41.5 percent of all applications.
“The purchase market continues to thrive this spring, with applications for home buyers climbing 7 percent from a year ago to the highest level since April 2010,” said Bob Broeksmit, MBA president and CEO. “Although slowly rising mortgage rates curbed refinancing activity last week, overall mortgage application volume was still 14 percent higher than a year ago.”
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