Higher Treasury yields pushed mortgage rates higher
of ConsumerAffairs
After several weeks of declining mortgage rates, the cost of financing a home moved up slightly this week. Freddie Macs Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.12% this week.
The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the markets enthusiasm on rate cuts was premature, said Sam Khater, Freddie Macs chief economist.
Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise. As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.
While the initial drop in mortgage rates attracted home buyers and homeowners seeking to refinance, that pace slowed last week. The Mortgage Bankers Association (MBA) reports mortgage applications fell by 1.3% from the previous week.
Last weeks incoming data showed an economy that is still growing at a solid pace, even as inflation continues to decline. As a result, mortgage rates were up modestly, with the 30-year fixed mortgage rate increasing slightly to 6.14%, said Mike Fratantoni, MBAs chief economist. "With this move, refinance application volume declined on the week but remains almost three times as high as last years pace.
However, Fratantoni says more homebuyers appear to be entering the market, as purchase application activity was up for the week and was 9% ahead of last years pace.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-10-03 16:14:53
