Mortgage rates increased one basis point to 3.11% in the week ending Dec. 2, ignoring the volatility in the financial markets caused by the Omicron Covid variant, according to the latest Freddie Mac PMMS mortgage report.
A year ago at this time, the average 30-year fixed-rate loan averaged just 2.71%, according to the report published on Thursday. Mortgage rates are in a historical low level, but the expectation is that they will increase in the coming months due to higher interest rates.
Sam Khater, Freddie Mac’s chief economist, said in a statement that the consistency of rates, in the face of changes in the economy, is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty. “This low mortgage rate environment offers favorable conditions for refinancing,” he added.
The survey focuses on conventional, conforming, and fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Economists at Freddie Mac said the 15-year fixed-rate mortgage averaged 2.39% last week, down from 2.42% the week prior. However, it’s higher than it was a year ago, at 2.26%. Meanwhile, the five-year ARM increased to 2.49%, up two basis points from last week. A year ago, 5-year ARMs averaged 2.86%.
Lenders, are you prepared for 2022’s challenges?
As lenders navigate through increased competition and fraud risk, it’s crucial they find solutions that balance workflow improvement.
Presented by: DataVerify
Mortgage rates tend to move in concert with the 10-year Treasury yield, which reached 1.43% on Dec. 1, down from 1.54% a week before.
The year-over-year increase in rates is impacting mortgage applications. The latest Mortgage Bankers Association (MBA) survey published on Wednesday showed a 7.2% decline for the week ending Nov. 26, in comparison to the previous week.
Compared to a year ago, the overall market composite index dipped 29.6% on a seasonally adjusted basis. “Over the past three weeks, rates are up 15 basis points, and refinance activity has declined over 18%,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement.
Source: housingwire.com