Mortgage Rates Continue to Surge Higher
Freddie Mac released its weekly update on national mortgage rates this morning, showing continued, strong increases in interest rates across the board.
Thirty-year fixed-rate mortgages (FRM) spiked 10 basis points to hit 3.91%, their highest rate since April 2012. Fifteen-year FRMs rose five b.p. to 3.03%, their highest rate since May of that year.
Increases in variable-rate mortgages were nearly as steep, with 5/1 adjustable rate mortgages jumping eight basis points to 2.74%, and one-year ARMs making a shorter, four-basis-point hop to 2.58%.
Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the across-the-board hikes to "continuing market concerns that the Federal Reserve may slow its bond purchases amid a strengthening economy ... In its June 5th regional economic conditions report, known as the Beige Book, the Federal Reserve noted that overall economic activity increased at a modest to moderate pace over April and May in all its districts except for Dallas which indicated strong economic growth." Adding to the pricing pressure, "pending home sales rose in April to its fastest pace since April 2010 and May's consumer sentiment was revised upwards to its highest reading since July 2007."
In short, homebuyers are being asked to pay more because they can.
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