Mortgage rates increased by 8 basis points this week as investors' pessimism in recent weeks over the economy and the continued spread of the coronavirus lifted slightly, according to Freddie Mac.
Still, the 30-year fixed rate mortgage remained below the 3% mark this week, the Freddie Mac Primary Mortgage Market Survey found, rising to an average of 2.96%, compared with 2.88%
The markets were highly volatile last week. Optimal Blue, a product and pricing engine provider with its own daily rate tracker, showed the 30-year FRM bottoming out at 2.839% on Aug. 10. The following day it rose to 2.876% and by Aug. 11 it was at 2.906%.
The increase over the past few days was the fastest in recent months. It ended a six-week stretch in which rates declined slowly due to pessimism over the COVID-19 surge in much of the nation and
"Stronger than expected inflation figures over the past couple days, along with some encouraging developments regarding a COVID-19 vaccine, fueled the increase, although doubts about the federal government's ability to agree on a new coronavirus relief bill appeared to hinder some of the upward motion," Speakman said. "Rates are still historically low, but the recent increases were a wakeup call for many market participants.
"Where rates go from here is difficult to predict, but if key economic data, such as Friday's retail sales figures, continue to impress, along with a deal in Washington, then more upward movement in rates could be on the way," he said.
For the same week last year, the 30-year FRM averaged 3.60%, Freddie Mac said.
"Homebuyer
Among the other products tracked by Freddie Mac, the 15-year FRM rose 2 bps from last week to an average of 2.46%; one year ago, this rate averaged 3.07%
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.90% with an average 0.4 point, unchanged from last week. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.35%.