Mortgage rates resumed their upward movement this week, but it’s not putting a damper on real estate sales activity, noted Freddie Mac.
|30-Year FRM||15-Year FRM||5/1-Year ARM|
|Fees & Points||0.5||0.5||0.3|
“Following a decline in the first nine months of 2019, mortgage rates have traded narrower during the last two months with a modest drift upward due to an improved economic outlook,” Chief Economist Sam Khater said in a press release. “While there has been a lag in the housing market’s response to lower rates, real estate volumes have clearly shifted into a higher gear. Moreover, the recent improvement in the cyclical segments of the economy and easing financial conditions will provide a gentle tailwind to the real estate market rebound over the next few months.”
The average rate for the 30-year fixed product rose two basis points over last week to 3.68% but this is still more than one full percentage point lower than last year’s 4.81%.
The 15-year FRM had an average rate of 3.15%, unchanged from the previous week. One year ago, it averaged 4.25%.
Average treasury-indexed 5/1 adjustable rate mortgages grew to 3.43% from 3.39% last week, but dropped from 4.12% for the same week in 2018.
“Mortgage rates held mostly steady in the leadup to the long Thanksgiving weekend,” Matthew Speakman, an economist for Zillow, commented when that company released its own tracker. “Rates have spent the better part of November retreating from October’s increases. While they remain above September’s 2019 lows, rates have not returned to the 4% range last seen in the spring, which appeared likely just a few weeks ago.”
The dominating theme for rate movements remains — and will continue to be — foreign trade and the economy.
“Doubts surrounding the U.S.-China trade talks are keeping rates in check for now, despite both sides expressing some optimism in recent days,” Speakman said. “Still, plenty of uncertainty remains in the market as rates appear just as likely to resume their ascension to higher levels as they are to retreat back towards 2019’s lows.
“Rate movements are generally volatile and difficult to predict in the days surrounding holiday long weekends, and with a bevy of blockbuster data releases — third quarter revised gross domestic product, consumer spending and ISM manufacturing – due in the coming week — it’s likely that this week’s steady pace of mortgage rate movements may soon be a thing of the past.”