“Rates are still lower than they were 20 years and they fluctuate every day,” Don Frommeyer, NAMB CEO told Mortgage Professional America. “The thing people need to remember is they’re still lower than they’ve ever been and rates are as low as they will be.”
Mortgage rates for 30-year loans hit their highest mark in months in preparation of an eventual central bank rate hike.
"Markets are preparing themselves for that eventuality, and that makes it harder for rates to fall," Keith Gumbinger, VP of loan research website HSH.com told Bloomberg.
The average rate for a 30-year fixed-rate mortgage rose to 4.09 percent Thursday, an increase from last week’s mark of 4.04 percent, according to Freddie Mac.
The average 15-year rate also rose, climbing to 3.25 percent from the previous 3.2 percent.
Industry pundits point to FED chair Janet Yellen’s recent remarks about the economy – and the FED’s benchmark rate – as reasons for the uptick in rates.
Earlier this week, Yellen spoke before the Committee on Financial Services, U.S. House of Representatives, noting continued economic progress.
“Since my appearance before this Committee in February, the economy has made further progress toward the Federal Reserve's objective of maximum employment, while inflation has continued to run below the level that the Federal Open Market Committee (FOMC) judges to be most consistent over the longer run with the Federal Reserve's statutory mandate to promote maximum employment and price stability,” Yellen said.
The industry interpreted Yellin’s positivity as foreshadowing for the eventual rate hike, which most believe will happen later this year. And it’s a stance Yellen has taken as well.
“We continue to anticipate that it will be appropriate to raise the target range for the federal funds rate when the Committee has seen further improvement in the labor market and is reasonably confident that inflation will move back to its two percent objective over the medium term,” Yellen said. “As always, the Federal Reserve remains committed to employing its tools to best promote the attainment of its dual mandate.”
Rates may be on the uptick, but they’re still at record lows.