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Mortgage rates primed for spring homebuying season

Posted on Thursday, March 10, 2016 at 10:05:41 AM

Just in time for the start of the early spring homebuying season, mortgage rates moved higher for the second week in a row inline with expectations. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage hit 3.68 percent for the week ending March 10. At this time one year ago, the 30-year FRM averaged 3.86 percent. 

"The 10-year mortgage yield ended the survey week exactly where it started, however the solid February employment report boosted the yield noticeably on Friday and Monday," said Sean Becketti, Freddie Mac chief economist. "Our mortgage rate survey captured the impact of this temporary increase in yield, and the 30-year mortgage rate rose 4 basis points to 3.68 percent. This marks the second increase this year. Nonetheless, the mortgage rate remains 33 basis points lower than its end-of-2015 level."

Such low residential financing rates are inarguably attractive to borrowers preparing to make a home purchase. Mortgage applications for new home purchases increased by 24 percent in February, the Mortgage Bankers Association reported, as the spring season kicked off.

Lynn Fisher, MBA's vice president of research and economics, estimated that February single family home sales hit 544,000 on a seasonally adjusted basis - up nearly 12 percent from one year prior.