Mortgage rates increased for a fourth straight week to reach the highest level in seven years, as the average rate for a 30-year fixed-rate mortgage rose to 4.72%, up from 4.65% the previous week, according to Freddie Mac’s Primary Mortgage Market Survey.
The increase comes the same week that the Federal Reserve increased the Fed funds rate by another 0.25% – the third rate hike this year. The Fed is expected to hike by another 0.25% in December.
“The robust economy, rising Treasury yields and the anticipation of more short-term rate hikes caused mortgage rates to move up,” says Sam Khater, chief economist for Freddie Mac ion a statement. “Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.
“Consumer confidence is at an 18-year high, and job gains are holding steady,” Khater adds. “These two factors should keep demand up in coming months, but at the same time, home shoppers will likely deal with even higher mortgage rates.”
For the week ended September 27, the average rate for a 15-year FRM was 4.16%, up from 4.11%. percent. A year ago at this time, the 15-year FRM averaged 3.13%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.97%, up from 3.92% the previous week. A year ago at this time, the five-year ARM averaged 3.20%.
