Residential financing continues trend of rising rates
Posted on Friday, May 15, 2015 at 7:38:07 AM
Before 2015 began, many residential financing experts predicted that rates would climb throughout the year. While the first few months countered that assessment, a recent trend of rising rates has emerged.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.85 percent for the week ending May 14. The 15-year FRM also increased from 3.02 percent to 3.07 percent. Even so, both of these fixed rates are well below year-ago averages.
"Mortgage rates rose for the third consecutive week as 10-year Treasury yields continued to climb," explained Len Kiefer, deputy chief economist at Freddie Mac. "The labor market continues to improve with [the] U.S. economy adding 223,000 jobs in April, a solid rebound from merely 85,000 job gains in March. Also, the unemployment rate dipped to 5.4 percent in April as the participation rate ticked up to 62.8 percent and jobless claims were far less than expected."
In addition, the Mortgage Bankers Association reported that residential financing applications decreased for the week ending May 8. At that time, applications fell by 3.5 percent from the prior seven-day period.
All in all, affordability is still high, even as the trend of higher rates continues across the country.