Mortgage Rates Just Went Up and More Volatility is Expected
Mortgage rates have increased this week, according to data from Freddie Mac, reported by the Washington Post. The 30-year fixed-rate average increased from 3.90 percent a week ago up to 3.94 percent this week. The 15-year fixed-rate average rose from 3.30 percent last week to 3.36 percent this week. Five-year adjustable rate mortgage average has gone up from 3.32 percent last week to 3.35 percent this week.
According to the Washington Post, the Senate vote on tax legislation was expected to spur an increase in mortgage rates. “A tax cut will only lead to accelerating inflation and higher rates,” said Joel Naroff, president and chief economist of Naroff Economics, to the Washington Post.
However, concerns are not solely domestic. International news could possibly turn the tide, the Washington Post explained.
“Concern about China’s economy, continuing tensions with North Korea, turmoil in the Middle East as a result of Trump declaring Jerusalem the capital of Israel, and a possible U.S. government shutdown have all contributed to a flight to safety trade that has seen Treasury yields and mortgage rates drop,” said Michael Becher, branch manager of Sierra Pacific Mortgage, to the Washington Post.
Bankrate.com has reported split opinions on the issue as well, the Washington Post noted. Of the experts surveyed, a third each predicted mortgage rates would go up, would hold steady, or would go down found the experts it surveyed were almost equally divided on where rates were headed. About a third predict they will go up, another third say they will go down and another third expect them to hold steady.
Mortgage applications grew last week thanks to refinancing, according to data from the Mortgage Bankers Association reported by the Washington Post, with over 50 percent of the applications aimed at refinancing.