Residential financing rates experience weekly surge
Posted on Friday, September 19, 2014 at 8:07:11 AM
Overall, 2014 has been a strong year for residential financing, as rates have steadily climbed down as the weeks progressed.
However, that has recently changed, although conditions are still favorable for homebuying and selling. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 4.23 percent for the seven-day period ending Sept.18. That is above the 4.12 percent reported last week, but remains below the year-ago level of 4.50 percent. On a similar note, the 15-year FRM averaged 3.37 percent this past week, compared to 3.26 percent the prior week.
"Fixed-rate mortgage rates rose this week following the increase in 10-year Treasury yields being partially fueled by market speculation the Federal Reserve might change its interest rate guidance," explained Frank Nothaft, vice president and chief economist at Freddie Mac. "Meanwhile, the Labor Department reported that its Consumer Price Index (CPI) declined 0.2 percent in August reflecting declines in energy prices. Excluding food and energy, the CPI was unchanged."
In addition, the Mortgage Bankers Association reported that residential financing applications were on the rise, up 7.9 percent on a weekly basis for the seven-day period ending Sept. 12. The Refinance Index ticked up 10 percent during that time. These are signs that mortgage loan application volume is increasing, even with higher rates.