Mortgage rates barely budged this week as the impact of the recent hurricanes began weighing on the economy.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average bumped up to 3.85 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.83 percent a week ago and 3.42 percent a year ago.
The 15-year fixed-rate average rose to 3.15 percent with an average 0.5 point. It was 3.13 percent a week ago and 2.72 percent a year ago. The five-year adjustable rate average fell to 3.18 percent with an average 0.4 point. It was 3.20 percent a week ago and 2.80 percent a year ago.
“The impact of [the] hurricanes will make it difficult to read a trend on economic data, keeping mortgage rates in a holding pattern,” said Greg McBride, chief financial analyst at Bankrate.com.
In addition to their effect on the overall economy, hurricanes in Texas and Florida disrupted the local real estate markets. The rush to rebuild is drawing on an already tight construction labor force, causing a drag on building in other parts of the country.
Mortgage rates are expected to move higher as the Federal Reserve begins winding down its balance sheet and likely hiking its benchmark rate later this year. But for now, their movement has stalled. Unless a dramatic event knocks them off their course, it appears home loan rates will continue to steadily rise, albeit slowly.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed predict rates will remain relatively stable in the coming week. Michael Becker, branch manager at Sierra Pacific Mortgage, is one who expects rates may slip in the coming week.
“Friday’s employment report should be on the weak side, partly because of the effects of Hurricanes Harvey and Irma, and partly because job growth has been slowing recently,” Becker said. “This should support lower Treasury yields and mortgage rates in the coming week.”
Meanwhile, mortgage applications were flat again last week, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — decreased 0.4 percent. The refinance index fell 2 percent, while the purchase index increased 1 percent.
The refinance share of mortgage activity accounted for 50.1 percent of all applications.
“As purchase applications picked up, we saw the ARM share increase to its highest level since January of this year,” said Joel Kan, an MBA economist. “We continue to closely track application volume as an indicator of the impact of the recent hurricanes. Overall mortgage application activity in Texas returned closer to national patterns, while Florida continued to see some bounce back after the hurricanes.”