Mortgage Giant, Freddie Mac released this weeks Prime Mortgage Market Survey (PMMS) showing the average mortgage rates on a fixed rate mortgage are continuing their upward spiral for the seventh consecutive week!
The survey reveals the following:
30-year fixed-rate mortgage (FRM) averaged 4.4 percent with an average 0.5 points for the week ending February 22,2018, showing a .02% rise from last week.
15-year FRM this week averaged 3.85 percent with an average 0.5 points, showing a .01% rise from last week.
5/1-year ARM averaged 3.65 percent this week with an average 0.4 points, up .02% from last week.
According to CNN these rates are the highest seen since April of 2014. Due to an improving economy, stronger inflation and the ballooning federal deficit, the 10-year Treasury yield is continuing to climb. As mortgage rates tend to track very closely with the 10-year Treasury yield, when it rises, so does the mortgage rates. Experts expect the rates to continue their upward spiral and possibly hit 5% by the end of the year.
"We expect buyers to remain a large pool, but also many more will be priced out of the market...since home prices don't seem to be slowing down," according to Javier Vivas, director of economic research at Realtor.com. "When we look at the spring home buying season, it will be a survival of the fittest. Those with larger down payments and better credit will be succeeding."
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One-point equals 1 percent of the loan amount.