Mortgage rates continue climbing
Mortgage rates are being pushed higher by the same economic factors that led the Federal Open Market Committee to increase short-term rates.
"Increasing inflation, continued gains in the labor market and the Fed's intentions for further rate increases-all three will keep pushing mortgage rates up this year", the company said in a release. Over the past two weeks, rates have increased 20 basis points.
In this scenario - motivated buyers, relaxed lending standards, and marginal mortgage rate increases, coupled with what appears to be strong wage and job growth - the spring-selling season could be the strongest one we've seen in many years.
According to the MBA, last week's average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.36% to 4.46%, its highest level since April 2014. The market composite index - a measure of total loan application volume - rose 3.1 percent. That is comforting to long-term bond investors and potentially good news for mortgage rates.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.28%, up from 3.23%.
A year ago at this time, the 30-year and 15-year fixed-rate mortgages averaged a respective 3.73% and 2.99%.
Historically, the central bank's moves have little effect on mortgage rates. "We expect that the benefits from growing household incomes will continue to outweigh the headwind of slightly higher mortgage rates", Fratantoni said.
"Our survey data shows that mortgage rates would have to be significantly higher to have any meaningful impact". The remaining 28 percent of respondents predict mortgage rates will resume their climb during the next seven days. Adjustable-rate loans offer lower interest rates and are becoming more popular as rates rise and affordability weakens. In addition, Bankrate licenses editorial content to more than 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times and The Los Angeles Times.