Average mortgage rates jump to highest level in over seven years
Mortgage rates, after a brief respite last week, rose to their highest level in over seven years, according to Freddie Mac.
|30-Year FRM||15-Year FRM||5/1-Year ARM|
|Fees & Points||0.5||0.5||0.3|
"In this week's survey, the 30-year fixed-rate mortgage jumped 19 basis points. Rates are now at their highest level since the week of April 14, 2011," Sam Khater, Freddie Mac's chief economist, said in a press release.
"Rising rates paired with high and escalating home prices is putting downward pressure on purchase demand. While the monthly payment remains affordable due to the still low mortgage rate environment, the primary hurdle for many borrowers today is the down payment and that is the reason home sales have decreased in many high-priced markets."
The 30-year fixed-rate mortgage averaged 4.9% for the week ending Oct. 11, up from last week when it averaged 4.71%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.91%.
The 15-year fixed-rate mortgage this week averaged 4.29%, up from last week when it averaged 4.15%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.21%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.07% with an average 0.3 point, up from last week when it averaged 4.01%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.16%.
"Strong employment and payroll data releases met analysts' expectations, providing more evidence of a booming U.S. economy," Aaron Terrazas, senior economist at Zillow, said when that company released its own rate tracker on Oct. 10.
"Markets tend to move in fits and spurts, with sharp movements often followed by brief retreats, as we've seen over the past few days. But there is no doubt that the trend is decisively higher, and comments from several Fed officials bolstered the notion that the American economy can withstand higher rates."
The next event that could affect interest rates is Thursday's consumer price data release and analysts will be looking for signs of changing conditions, Terrazas said. "If prices are rising faster than expected, rates would be primed to climb even higher. A weaker release could offer borrowers temporary relief, though it will take more than a one rate-friendly data release to undo last week's rally."