Mortgage rates have reversed course and reached a new high last seen seven years ago as the yield on the 10-year Treasury crossed the 3% threshold this week, according to Freddie Mac.
|30-year FRM||15-Year FRM||5/1-Year ARM|
|Fees & Points||0.4||0.4||0.3|
The 30-year fixed-rate mortgage averaged 4.61% for the week ending May 17, up from last week when it averaged 4.55%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.02%.
"Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week," Sam Khater, Freddie Mac's chief economist, said in a press release.
"While this year's higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5% could begin to hit the psyche of some prospective buyers."
The 15-year fixed-rate mortgage this week averaged 4.08%, up from last week when it averaged 4.01%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.27%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.82% this week with an average 0.3 point, up from last week when it averaged 3.77%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.13%.
"Signs of an economy humming along near full capacity, geopolitical developments in the Middle East which could push oil prices sharply higher and comments from several Fed officials all contributed to the upward move. Markets currently expect three interest rate hikes from the Federal Reserve Board this year, but comments from several FOMC voters over the next week could move expectations for a potential fourth rate hike before 2019. Given recent sensitivity around oil prices and inflation, markets are also likely to watch energy market data more than is typical," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on May 16.