Since the start of the year, the average 30-year, fixed mortgage rate has been rising, with an increase just this week up to 4.45 percent from 4.44 the week before, according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®).
The Federal Reserve increased its interest rate this Wednesday, the first of three expected raised of 2018.
“The Federal Reserve raised interest rates [this week]—a much-anticipated move that comes as both U.S. and global economic fundamentals continue to strengthen,” says Len Kiefer, deputy chief economist at Freddie Mac. “The Fed’s decision to raise interest rates by a quarter of a percentage point puts the federal funds rate at its highest level since 2008. The decision, while widely expected, sent the yield on the benchmark 10-year Treasury soaring. Following Treasurys, mortgage rates shrugged off last week’s drop and continued their upward march. The U.S. weekly average 30-year fixed mortgage rate rose one basis point to 4.45 percent in this week’s survey.”
The average 15-year, fixed mortgage rate this week went up to 3.91 percent, from 3.90 according to the PMMS, with the Treasury-indexed hybrid adjustable rate increasing to 3.68 percent from 3.67.
According to Kiefer, housing is responding well to the rising rates.
“So far, U.S. housing markets remain resilient in the face of higher mortgage rates,” Kiefer says. “The National Association of REALTORS® (NAR) reported this week that existing-home sales in February increased 3 percent month-over-month on a seasonally adjusted basis and are up 1.1 percent from a year ago. That momentum is carrying through into spring. In the latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey, the home purchase mortgage applications index was up 6 percent from the same week a year ago.”