Mortgage rates are steadily increasing and this week, according to Bankrate, the 30 year fixed rate mortgage (FRM) is up a shocking eight basis points since last week, and sits at 4.05%. Also gradually rising this week is the 15-year fixed rate mortgage which rose four basis points from 3.30% a week ago to 3.34%. On the other hand, the 5/1-yr adjustable rate mortgages fell one basis point from 3.90% last week to 3.89% this week. As a result of the increasing mortgage rates, mortgage applications to purchase a home fell 4% for the week but they were still 7% higher than a year ago, according to the Mortgage Bankers Association. However, mortgage applications to refinance actually increased 2% for the week which is a staggering 87% higher than a year ago when mortgage rates were 67 basis points higher.
On the other hand, Freddie Mac has the mortgages rates listed lower than Bankrate with the 30 year FRM at 3.81% up six basis points since last weeks 3.76%. The 15-year FRM follows suit with a slight upward trend of one basis point from 3.22% to 3.23%. Yet, this is still 77 basis points lower than it was a year ago. In contrast to Bankrate, the 5/1 year ARM actually increased by two basis points since last week and now sits at 3.48%. These rates are seeing increases as a result of the continued improvement in consumer spending as well as an optimism for a cut in short term interest rates, which should provide business and investor sentiments with support.
Below is a graph from Freddie Mac showing the U.S. weekly averages for 30-yr FRM, 15-yr FRM, and 5/1-yr ARM as of July 18, 2019.