Mortgage Rates Rise As The Holiday Approaches

Lenders like The Federal Savings Bank were eager to read the latest Freddie Mac Primary Mortgage Market Survey for the week ending July 2nd. The survey showed that the average interest rates reached the highest point this year.
Interest rates increase
The average 30-year fixed-rate mortgage jumped up when compared to the previous week. However, this rate remains slightly lower than last year’s rates. In addition, the 15-year FRM jumped from last week as well as last year.
Both 5-year Treasury-indexed hybrid adjustable-rate mortgages and 1-year Treasury-indexed ARMs jumped up from the previous week.
Behind the bump
Freddie Mac’s Chief Economist Sean Becketti noted that events occurring overseas have caused interest rates to fluctuate a great deal on a daily basis. However, the changes compared on a week-over-week basis are relatively subtle.
“Other measures, however, confirmed continued strength in housing – pending home sales rose 0.9 percent, exceeding expectations, and the Case-Shiller house price index recorded another solid increase,” Becketti added.
The improving housing market may be driven largely by the return of the first-time home buyer as many young adults are deciding to purchase homes of their own. The National Association of Realtors indicated in their pending home sales index report, released on June 29th, which showed an increase to its highest level in nine years. This forward-looking indicator suggests the housing market is in great health and the interest rates are reflecting that.
All regions of the U.S. experienced positive growth
Across the U.S. pending home sales increased.
“The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring,” said the NAR’s Chief Economist Lawrence Yun. “It’s very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.”
Contact The Federal Savings Bank, a veteran owned bank, to learn more about mortgages.