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Residential financing rates reverse trend, continue to climb

Posted on Thursday, June 12, 2014 at 10:02:25 AM

Residential financing rates over the past several months have steadily ticked down, opening up the door for many more buyers to seek out home loans and begin the process to purchase a new home. While rates remain historically affordable, the past two weeks have seen a reversal of this trend.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 4.20 percent for the week ending June 12, up from the previous week's average of 4.14 percent. The 15-year FRM also increased slightly during that time, as did the 5-year Treasury-indexed hybrid adjustable-rate mortgage. The one-year variant remained unchanged.

"Mortgage rates continued to climb for the second week in a row following the increase in 10-year Treasury yields," explained Frank Nothaft, vice president and chief economist at Freddie Mac. "Also, the economy added 217,000 jobs in May, following a 282,000 surge in April and a 203,000 increase in March. Meanwhile, the unemployment rate in May held steady at 6.3 percent."

In addition to the uptick in residential financing rates, the Mortgage Bankers Association reported that more Americans have been interested in mortgages. The amount of mortgage applications ticked up 10.3 percent on a weekly basis for the week ending June 6.