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US mortgage rates inch higher for a second week
US mortgage rates are starting to crawl back up after falling to 14-month lows.
According to the latest data released on Thursday by Freddie Mac, the 30-year fixed-rate average increased to 4.12 per cent with an average 0.5 point. It was 4.08 per cent a week ago and 4.42 per cent a year ago.
Points are fees paid to a lender equal to one per cent of the loan amount and are in addition to the interest rate.
The 15-year fixed-rate average also moved higher to 3.6 per cent with an average 0.4 point. It was 3.56 per cent a week ago and 3.87 per cent a year ago.
The five-year adjustable rate average jumped to 3.8 per cent with an average 0.4 point. It was 3.66 per cent a week ago and 3.61 per cent a year ago.
"Despite the recent rise, we expect mortgage rates to remain low, in line with 10-year Treasury yields," said Freddie Mac chief economist Sam Khater.
The 10-year Treasury yield has hovered around 2.5 per cent since the start of the month.
The upturn in mortgage rates comes in the face of recent economic news that typically keeps home loan rates in check.
Friday's employment report showed wage growth had slowed. The consumer price index for March, which was released this week, saw its biggest jump in 14 months, but core CPI fell to its lowest level in a year.
The US Federal Reserve released the minutes from its March meeting, which reinforced the position that central bank officials expect economic growth to be slower than it was last year and are unlikely to raise the benchmark rate.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed say rates will remain relatively stable in the coming week.
Les Parker, senior vice president of LoanLogics, disagrees. He points to the symbiotic relationship between oil and the US dollar. "When markets are calm, oil and the dollar tend to trade inversely," he said. "If the dollar takes off and oil falls, then mortgage rates will fall."
Meanwhile, rising rates caused mortgage applications to pull back. According to the latest data from the Mortgage Bankers Association (MBA), the market composite index decreased 5.6 per cent from a week earlier.
The refinance index fell 11 per cent from the previous week, while the purchase index ticked up one per cent. WP