After dropping slightly for three weeks in a row, mortgage rates were back on the rise this week, with the average rate for a 30-year fixed-rate mortgage inching back up to 4.52%, up from 4.51%, according to Freddie Mac’s Primary Mortgage Market Survey.
A year ago at this time, the 30-year FRM averaged 3.82%.
“The 30-year fixed-rate mortgage barely inched up this week, continuing the summer trend of essentially being flat,” says Sam Khater, chief economist for Freddie Mac, in a statement. “While sales and price growth have softened these last few months, this leveling of rates may be helping more buyers reach the market. Purchase mortgage applications this week were once again modestly above year ago levels.”
Khater says the recent slowdown in home price appreciation in several markets is good news for the many prospective buyers who were priced out earlier this year.
However, despite the economy in the second quarter expanding at its fastest rate in nearly four years, Freddie Mac is still expecting only a slight increase (0.2%) in total home sales in 2018 (6.14 million) compared to last year (6.12 million).
“Given the strength of the economy, it is possible for home sales to pick up even more before year’s end,” Khater says. “The key factor will be if affordably-priced inventory increases enough to continue this recent trend of cooling price appreciation.”
For the week ended Aug. 30, the average rate for a 15-year FRM was 3.97%, down slightly from 3.98% the previous week. A year ago at this time, the 15-year FRM averaged 3.12%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.85% up from 3.82%. A year ago at this time, the five-year ARM averaged 3.14%.
