The 15-year fixed-rate average jumped to 3.2 percent with an average 0.5 point. It was 3.13 percent a week ago and 4.36 percent a year ago. The five-year adjustable rate average rose to 3.44 percent with an average 0.4 point. It was 3.39 percent a week ago and 4.14 percent a year ago.
“The modest uptick in mortgage rates over the last two months reflects declining recession fears and a more sanguine outlook for the global economy,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
U.S.-China trade discussions have been a prime mover of mortgage rates lately. The recent positive developments in these talks are reflected in the uptick in rates.
“Trade talks between the U.S. and China have been warming, and reports that they had agreed to cancel some tariffs drove bond yields, and thus mortgage rates, higher,” said Matthew Speakman, a Zillow economist. “Those agreements were later walked back, but yields retreated only slightly as investors remained hopeful that the talks were progressing, albeit somewhat erratically.”
The yield on the 10-year Treasury — the most closely watched measure for mortgage rates — dropped to 1.88 percent on Wednesday after rising to 1.94 percent on Nov. 8.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half of the experts it surveyed say rates will remain about the same in the coming week. Logan Mohtashami, senior loan officer at AMC Lending Group in Irvine, Calif., expects rates to hold steady but says upcoming economic data or trade or political news may cause some volatility.
“Keep a watchful eye on global and domestic PMI data,” Mohtashami said. “Any news from the trade war tap dance and impeachment hearings might move yields and the market in the short term.”
Meanwhile, refinances caused mortgage applications to shoot up to their highest level in more than a month. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — increased 9.6 percent from a week earlier. The refinance index climbed 13 percent, while the purchase index grew 5 percent.
The refinance share of mortgage activity accounted for 61.9 percent of all applications.
“With less than two months left in 2019, home buyer demand — especially at the entry-level segment of the market — continues to be supported by a healthy economy, solid hiring and low mortgage rates,” said Bob Broeksmit, MBA president and CEO.
The MBA also released its mortgage credit availability index (MCAI) this week that showed credit availability increased in October. The MCAI rose 0.9 percent to 185.1 last month. An increase in the MCAI indicates lending standards are loosening, while a decrease signals they are tightening.
“Mortgage credit availability expanded in October, driven mainly by an increase in conventional loan programs, including more for borrowers with lower credit scores, as well as for investors and second home loans,” said Joel Kan, an MBA economist. “Credit supply for government mortgages continued to lag, declining for the sixth straight month. Meanwhile, the jumbo credit index increased 3 percent to another survey-high, as that segment of the market stays resilient despite signs of a slowing economy.”