Mortgage rates increased for the first time this year, though only by the slightest of margins.
According to the latest Freddie Mac Primary Mortgage Market Survey, the average 30-year fixed mortgage rate was 4.46 percent for the week ending January 31. That was up from the previous week when it averaged 4.45 percent. A year ago, the average 30-year rate was 4.22 percent.
Fifteen-year fixed rates also increased by a single basis point, from 3.88 percent to 3.89 percent. Last year’s average 15-year rate was 3.68 percent.
The average 5-year adjustable rate mortgage was 3.96 percent last week, up from 3.90 percent the week before. Last year, 5-year ARM rates averaged 3.53 percent.
“Purchase applications were down this week after soaring early in the year,” said Freddie Mac Chief Economist Sam Khater. “However, softening house price appreciation along with increasing inventory of homes on the market – and historically low mortgage rates – should give a boost to the spring homebuying season.”
It’s expected that mortgage rates will fall in the coming weeks.
Last week, the Federal Reserve decided to hold off on interest rate increases. This was taken as a sign that economic growth may slow. This increased interest in bonds, which often occurs if there are signs the economy is weakening.
Surging interest in bonds sent yields on 10-year Treasuries lower. Mortgage rates tend to move in roughly the same pattern as Treasury yields. They typically remain higher than Treasury yields because they are a riskier investment. Thus, as Treasuries rise or fall, so do mortgage rates.