Mortgage interest rates continued their steady climb heading into the Independence Day holiday weekend, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending July 2. The government-sponsored enterprise said rates are at their highest levels since October 2014.
According to the survey:
- The average rate for a 30-year fixed-rate mortgage was 4.08 percent, up from 4.02 percent the previous week. A year ago at this time, this rate averaged 4.12 percent.
- The average rate for a 15-year fixed-rate mortgage was 3.24 percent, up from 3.21 percent the week prior. This rate averaged 3.22 percent at the same time last year.
- The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage was 2.99 percent, up from 2.98 percent. A year ago, this rate averaged 2.98 percent.
- The average rate for a one-year Treasury-indexed ARM was 2.52 percent, up from last week’s 2.5 percent. At this time last year, this rate averaged 2.38 percent.
With the Federal Reserve expected to begin raising short-term rates by the end of the year as U.S. economic conditions continue to improve, the increases are not taking anyone by surprise. However, overseas events may be contributing to daily volatility in interest rates as well, said Sean Becketti, chief economist for Freddie Mac.
Many economists are eyeing the situation in Greece, which has defaulted on its debt repayments and may exit the eurozone economy. This may increase demand for U.S. mortgage-backed securities.
“Nonetheless, the week-to-week impact on most rates was modest,” Becketti said. “The 30-year mortgage rate increased just six basis points, to 4.08 percent. The [Mortgage Bankers Association’s] composite index of mortgage applications fell 4.7 percent in response to what is now three consecutive weeks of mortgage rates over 4 percent. Other measures, however, confirmed continued strength in housing. Pending home sales rose 0.9 percent, exceeding expectations, and the Case-Shiller house price index recorded another solid increase.”
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