After plunging to a new record low week after week, mortgage rates saw gains last week.
Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) rose to 3.01%, up from 2.98% the previous week. The 15-year FRM and the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also posted increases.
The rate for the 15-year mortgage jumped six basis points to 2.54%, while the 5-year ARM climbed three basis points to 3.09%. A year ago at this time, the 30-year FRM was hovering at around 3.75%, the 15-year FRM at 3.18%, and the 5-year ARM at 3.47%.
Freddie Mac Chief Economist Sam Khater expects ultra-low rates continue to fuel consumer demand in the short term.
“While housing demand continues to rebound, the month-long swoon in economic activity has caused the 10-year Treasury benchmark to drop. In the short term, this means the demand will continue on the back of near record-low mortgage rates,” Khater said. “However, the most recent consumer spending data has been pointing to slow growth since mid-June. The concern is that the pause in economic activity will cause unemployment to remain elevated, which will lead to longer-term labor market distress.”