The 30-year fixed-rate mortgage averaged 4.54% during the July 26 week, up two basis points, according to weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.02%, also up two basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, unchanged during the week.
Those rates don’t include fees associated with obtaining mortgage loans.
Mortgage rates track the yield on the 10-year U.S. Treasury note, which jumped over the past week. Investors concerned about a global trade war had piled into bonds over recent weeks. But as those worries eased and investors digested more hawkish signals from the Bank of Japan, that trade has unwound and yields have jumped. Bond yields and prices move in opposite directions.
The housing market may be facing its own moment of reckoning.
As MarketWatch reported last month, many economists are convinced it’s reached the end of the housing cycle.
“Existing sales appear to have peaked, sales of newly built homes are slowing and unsold inventory is rising for the first time in three years,” Khater noted.
For now, it seems, Americans still want to try to be homeowners. For the year to date, mortgage rates are on average 37 basis points higher than the same period in 2017 – 4.43% versus 4.06%. But mortgage purchase applications are 4.25% higher compared to a year ago, according to data from the Mortgage Bankers Association.
Still, rising rates coupled with higher home prices could dent some of that demand. “This is why new and existing-home sales are not breaking out this summer despite the healthy economy and labor market,” Khater added.
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