Mortgage rates decline but signs point to an increase on the horizon
Mortgage rates dropped slightly this past week, but analysts warn they could move higher following a sell-off in the bond market earlier this week.
According to the June 29 Freddie Mac Primary Mortgage Market Survey, the average rate on a 30-year fixed mortgage was 3.88 percent, down from the previous week’s 3.90 percent. A year ago at this time, the average 30-year fixed rate was 3.48 percent
The average rate on 15-year mortgages remained steady week-over-week at 3.17 percent. Last year’s 15-year average rate was 2.78 percent.
Both rates are expected to move higher next week. That’s because of a sell-off in the bond market that occurred after most of the Freddie Mac data was reported.
Because of Tuesday’s sell-off, the yield for the benchmark 10-year Treasury note record one of its highest weekly gains in four months. When Treasury yields rise, banks charge higher interest rates for mortgages; when they fall, banks typically lower mortgage rates.
According to the latest Freddie Mac survey the average rate on 5-year Treasury-indexed adjustable rate mortgages was 3.17 percent, up from 3.14 the week before and 2.70 percent the year prior.
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