Mortgage Rates Jump to 7-Week High
Aug 2nd, 2018 @ 2:24 PM by Amber Nelson
During the week ended, August 2, 2018, the average rate on a 30-year fixed rate mortgage (FRM) rose to 4.60%, with an average 0.4 point, up from 4.54 percent the week before, rising for the second week in a row. It has now reached the highest level since the week of June 14 when the average was 4.62%. This week’s rate is the fourth highest of 2018. Compared with last year, rates are up from 3.93%.
Freddie Mac chief economist Sam Khater remarked that rising rates have strained the housing market. “The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months,” he said. “Yesterday, the Federal Reserve passed on raising short-term rates, but with the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in coming months.”
And mortgage borrowers may have an even harder time in the near future, Khater added, “Even with home price growth easing slightly in some markets, mortgage rates hovering near a seven-year high will certainly create affordability challenges for some prospective buyers looking to close.”
Other rates jumped as well with the 15-year FRM climbing to 4.08% with an average 0.4 point, up from 4.02% last week and 3.18% a year ago. The average rate on a 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 3.93% with an average of 0.2 point, up from 3.87% the week before. One year earlier, the 5-year ARM was near historic lows, averaging 3.15%.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.