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Mortgage Rates Jump for Second Straight Week

Mortgage Rates Jump for Second Straight Week

The five-year Treasury-indexed hybrid adjustable-rate mortgage came in at an average of 3.28%, marking a five-point increase over the week.

Mortgage rates are right in line with yesterday's levels, and yesterday saw rates fall at the fastest pace of the year, ultimately reaching the lowest levels in more than a week.

The larger jumbo 30-year fixed climbed to 4.43 percent and the average 15-year fixed mortgage rate stepped up to 3.64 percent.

Much of the commentary surrounding the Federal Reserve's decision Wednesday to raise the Fed Funds rate by 25 basis points has been about how this is likely to increase mortgage rates, have a negative effect on home affordability, and potentially derail the still-wobbly recovery of the USA housing market. This time it raised its inflation expectations slightly for 2017, and signaled that it won't freak out if inflation exceeds its 2 percent target for a while.


Rates rose in anticipation of a widely expected hike in the Federal Reserve's key interest rate, which the central bank announced Wednesday. A year ago, the five-year ARM averaged 2.93%. The panelists are fairly evenly divided this week, with 36 percent expecting mortgage rates to continue falling and an equal 36 percent forecasting that mortgage rates will remain more or less unchanged over the coming week. "Although our survey was conducted prior to the Fed's decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year mortgage rate nine basis points to 4.30 percent this week". "Rising rates pose just a modest headwind for home shoppers in the priciest housing markets. Tight inventory remains a much more pressing concern for home shoppers today, a situation that is unlikely to ease in the months ahead".

The contract interest rate for a 5/1 adjustable-rate mortgage loan decreased from 3.48% to 3.45%.

"Surprisingly, refinance application volume increased for the week, perhaps a sign that homeowners see rates moving away from them and are moving to lock in now before rates increase further", said Mike Fratantoni, MBA's chief economist.


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