Mortgage Rates Increase, Just as Home-Sales Activity Regains Momentum
By Jacob Passy | Sep 19, 2019
Prospective Buyer Attends Open Houses Ahead Of Existing Home Sales
Mortgage rates rose on a weekly basis for the second week in a row, potentially threatening to put a damper on home sales just as the real-estate market’s outlook was brightening.
The 30-year fixed-rate mortgage averaged 3.73% during the week ending Sept. 19, rising 13 basis points from the previous week, Freddie Mac reported Thursday. This was only the 11th weekly increase in mortgage rates this year.
The 15-year fixed-rate mortgage increased 12 basis points to an average of 3.21%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.49%, up 13 basis points.
The Federal Reserve, when it cuts interest rates, is adjusting short-term rates. Mortgage rates, on the other hand, roughly track the direction of the 10-year Treasury note.
However, neither the Federal Reserve nor bond markets were the likely culprit behind this week’s increase in mortgages rates. Rather, improving economic data and the higher demand for mortgages, especially to purchase homes, gave lenders room to boost rates.
“While there was an initially slow response to the overall lower mortgage-rate environment this year, it is clear that the housing market is finally improving due to the strong labor market and low mortgage rates,” Freddie Mac chief economist Sam Khater said Thursday.