An increase of six basis points is normal within week over week reporting. However, it is the trend which has many borrowers showing signs of concern. The benchmark thirty-year mortgage crept to the highest point of 2018 and now sit as 4.610%. The news was reported yesterday as Freddie Mac released its primary market survey which tracks mortgage rate movement.
A seller’s market
Adding consternation to those in the market to purchase a home is the fact the current market is defined as a “seller’s market.” That translates into fewer properties on the market, thus buyers have been forced to make competitive offers and the result is higher sales prices.
Those in the market to purchase a new home or refinance their existing mortgage usually take a very cautious position when contemplating a transaction. The economy has been on a nine-year recovery and each month there has been improvement. Unemployment is at record lows. Some have received bonuses or extra money in their paychecks. All of this may sound good on a political front, however the increase in rates represents higher cost and puts first time buyers in jeopardy as there is added pressure on them to qualify for a loan.
Rates have increased approximately fifty basis points from a year over year comparison
Here is a snapshot of rates for popular programs:
May 17, 2018
|30-Yr FRM||15-Yr FRM||5/1-Yr ARM|
|Average Rates||4.61 %||4.08 %||3.82 %|
|Fees & Points||0.4||0.4||0.3|
** each week Freddie Mac publishes the rate survey. It is retrieved from a sampling from its lenders who sell mortgages to them. The report is an industry standard and used to gauge consumer mortgage rate movement.