Average fixed-term mortgage rates stayed under 3% for a third straight week, but an improving jobs outlook and economy may soon reverse the trend of declining rates over the past two months.
The average 30-year fixed-rate mortgage nudged down slightly to 2.96%
The recent decline in interest rates and
“Consumer income and spending are picking up, which is leading to an acceleration in economic growth. The combination of low and stable rates, coupled with an improving economy is good for homebuyers,” he said.
However, low rates and a shortage of inventory on the market have led to bidding wars and rising prices for homes, resulting in an
The average rate of 15-year fixed-term mortgages also remained relatively flat, falling only one basis point week-over-week from 2.31% to 2.3%. One year ago, the average was 2.73%. But the 5-year Treasury-indexed adjustable-rate mortgage showed a slight increase, rising to 2.7% compared to 2.64% the previous week, and well below the rate of 3.14% the same week in 2020.
Developments over the past week hint that higher interest rates could be in the offing. In an interview released on Tuesday, Treasury Secretary Janet Yellen said that rates may need to “rise somewhat” to prevent an overheating economy during a post-pandemic recovery, though she later clarified that her comment shouldn’t be characterized as a recommendation. The Federal Reserve has continued to say that interest rates
The release of the U.S. government’s April employment numbers and other data later this week may go further toward determining the trajectory Treasury yields and corresponding interest rates take this year, said Zillow economist Matthew Speakman.
“April employment figures and inflation data, two key gauges of the economy’s path forward, are due this week, and stronger-than-expected readings of either — or both — reports will likely revert mortgage rates back upward,” Speakman said in a statement.
