After two months of consecutive declines in mortgage interest rates Freddie Mac reported that they have finally moved upward amidst subsiding financial market turbulence.
Freddie Mac reported in its Primary Mortgage Market Survey that the 30-year fixed-rate mortgage (FRM) averaged 3.64 percent with an average 0.5 point for the week ending March 3, 2016. This rate is up from last week when it averaged 3.62 percent, but down from year ago when it averaged 3.75 percent.
The 15-year FRM averaged 2.94 percent this week with an average 0.5 point, up from last week when it averaged 2.93 percent. The 15-year FRM averaged 3.03 percent a year ago at this time.
According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week with an average 0.5 point, up from last week when it averaged 2.79 percent. This rate averaged 2.96 percent last year at this time.
Sean Becketti, Chief Economist at Freddie Mac said, "The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality. Treasury yields approached their highest level in a month, boosting the 30-year mortgage 2 basis points this week to 3.64 percent. Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook, and the market expects the Fed to refrain from any further short-term rate increases for now."
Alhough interest rates ticked up slightly, they still remain at historical lows, which is not motivating homebuyers to purchase a home.
Mortgage applications fell 4.8 percent this week, according to the Mortgage Bankers Association(MBA). On an unadjusted basis, applications fell 7 percent. Refinance applications decreased 7 percent from last week to 58.6 percent of total applications, falling to its lowest level since January 2016. Purchase applications declined 1 percent from one week earlier, while the unadjusted purchase applications increased 14 percent compared with the previous week and was 27 percent higher than the same week one year ago.