Mortgage rates end week flat despite Brexit, China trade news
Mortgage rates ended the week unchanged from the previous seven-day period, according to Freddie Mac, although not without some gyrations from the results of the elections in the United Kingdom and U.S-China trade talks.
"Mortgage rates had a volatile few days following notable developments in both the ongoing Brexit and China trade pact discussions, but ultimately finished the week largely in line with where they began," said Zillow economist Matthew Speakman in a statement accompanying its rate tracker. There were some wild swings throughout the week, with Zillow's data finding the 30-year fixed bouncing between 3.6% and 3.8%, ending at 3.65% on Dec. 18.
"The fact that mortgage rates haven't taken off like a rocket in response to either or both of these developments speaks to the complexity of the two situations and the remaining work needed on both fronts," he said. "Investors also appear to be learning the value of patience, and to wait for more concrete details on these topics — particularly the U.S.-China trade deal — before adjusting their positions."
The 30-year fixed-rate mortgage averaged 3.73% for the week ending Dec. 19, the Freddie Mae Primary Mortgage Market Survey reported, unchanged from last week. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.55%.
"The economy continued to pick up momentum with a solid increase in residential construction, improvement in industrial output in our nation's factories and a rise in job openings. While the economy is in a sweet spot, improvements in housing market sales volumes will be modest heading into next year simply due to the lack of available inventory," Sam Khater, Freddie Mac's chief economist, said in a press release.
"The demand is clearly not being met for entry-level millennials and trade-up Generation X homebuyers. If there was more inventory of unsold homes for buyers to choose from, home sales would be rising at a faster rate."
The 15-year fixed-rate mortgage averaged 3.19%, unchanged from last week, Freddie Mac reported. A year ago at this time, the 15-year fixed-rate mortgage averaged 4.01%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.37% with an average 0.4 point, up slightly from last week when it averaged 3.36%. A year ago at this time, the five-year adjustable-rate mortgage averaged 4%.
With 2019 coming to an end, it is highly unlikely that there will be any big shift in mortgage rates in the next couple of weeks.
"Rates typically don't stray much from established levels in the weeks that end one year and begin another. So despite key readings on consumer spending and sentiment due this Friday, significant rate movements appear unlikely in the coming days," said Speakman.