October 4, 2018

Mortgage rates inched back a little in this week’s survey, easing 1 basis point to 4.71 percent after hitting a seven year high last week. There is upside risk to mortgage rates as the economy remains very robust and this is reflected in the very recent strength in the fixed income and equities markets.
However, the strength in the economy has failed to translate to gains in the housing market as higher mortgage rates have contributed to the decrease in home purchase applications, which are down from a year ago. With mortgage rates expected to track higher, it’s going to be a challenge for the housing market to regain momentum.

Information provided by Freddie Mac.

The 30-year fixed-rate mortgage rose for the fifth consecutive week to 4.72 percent – a high not seen since April 28, 2011 (4.78 percent).
The robust economy, rising Treasury yields and the anticipation of more short-term rate hikes caused mortgage rates to move up.
Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.
Consumer confidence is at an 18-year high, and job gains are holding steady. These two factors should keep demand up in coming months, but at the same time, home shoppers will likely deal with even higher mortgage rates.

Information provided by Freddie Mac.

The 30-year fixed-rate mortgage increased once again to its highest level since May.
Mortgage rates are drifting upward again and represent continued affordability challenges for prospective buyers – especially first-time buyers. Borrowing costs are moving right now for three main reasons: the very strong economy, higher U.S. government debt issuances and global trade tensions.

Information provided by Freddie Mac.