Economic conditions drove a surge in mortgage rates during the week ending September 27, with rates for the 30-year fixed-rate mortgage rising to a high not seen since April 28, 2011, according to the Primary Mortgage Market Survey released by Freddie Mac.
Rates for the 30-year fixed-rate mortgage averaged 4.72%, with an average 0.5 point, up from the previous average of 4.65%. The mortgage averaged 3.83% in the same week in 2017.
The 15-year fixed-rate mortgage averaged 4.16%, with an average 0.5 point, up from the previous 4.11% average. A year ago at this time, the mortgage averaged 3.13%.
The average rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 3.97%, with an average 0.3 point, from 3.92%. The 5-year ARM averaged 3.2% in the year-ago period.
“The robust economy, rising Treasury yields, and the anticipation of more short-term rate hikes caused mortgage rates to move up,” Freddie Mac Chief Economist Sam Khater said. “Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.”
Khater also said he expects demand to remain elevated in the coming months as job gains hold steady and after consumer confidence hit an 18-year high.