Mortgage rates are trending higher, Freddie Mac says
Mortgage rates moved higher this week after spending a month within a hair or two of 4.5%, according to the latest survey from home loan financing giant Freddie Mac.
The 30-year fixed-rate loan stood at an average of 4.6% in the closely watched Freddie Mac tally, up from 4.51% a week earlier. The rate has risen to where it was at the end of May, before the latest dip. Rates tend to track the yield on the 10-year Treasury bond, which has moved higher since hitting a low June 24.
The government-controlled Freddie Mac, which asks lenders each week about the terms they are offering to well-qualified borrowers, said Thursday that the 15-year fixed-rate mortgage was being offered at an average rate of 3.75% this week. Last week the rate averaged 3.69%.
The borrowers in the survey would have had solid credit and down payments and/or home equity totaling 20%, and would have paid 0.7% of the loan amount upfront on average in fees and discount points to the lenders.
Freddie Mac said rates for adjustable loans are on the rise as well. But it emphasized that home finance is still a terrific deal by historical standards.
“Interest rates on all mortgages outstanding in the first quarter of this year averaged just under 6%,” said Freddie Mac’s chief economist, Frank Nothaft. “With today’s rates, these homeowners who have the ability to refinance could shave $169 per month in interest payments on a $200,000, 30-year fixed mortgage.”
However, the trend of rising rates seemed likely to cut further into already dwindling refinancings, since most homeowners willing and able to replace their loans already have done so with rates below 5% for much of the last two years.
A Mortgage Bankers Assn. report on home-loan applications, released Wednesday, showed a 9.2% decrease in new refinancings last week from the previous week. Refi volume has declined for three consecutive weeks.
