US mortgage rates continue to climb
- U.S. mortgage rates continue to edge higher, with government-backed lender Freddie Mac reporting that a 30-year fixed-rate mortgage averaged 4.16% for the week ending Dec. 15, up from 4.13% the week prior and compared to 3.97% in the same period a year earlier.
- The Primary Mortgage Market Survey also found that a 15-year FRM averaged 3.37%, up from 3.36% the week before.
- The survey reported drops in both refinance and purchase applications in the wake of recent mortgage rate rises.
The latest Freddie Mac survey was compiled before the Federal Reserve Board’s decision last week to raise interest rates by 25 basis points, to a range of 0.50% to 0.75%.
But the lender warned that activity in the mortgage market could be “significantly subdued” heading into next year if rates continue to build on their recent upward movement.
This joins other data showing that homes have become less affordable since the Nov. 8 election as mortgage interest rates have increased about 50-basis points.
Higher mortgage rates and home prices are set to continue presenting major challenges for younger, first-time buyers seeking to enter the market. It is also expected to impact the volume of existing homeowners looking to refinance their mortgages and raise borrowing costs for homebuilders.
Despite the recent hikes, mortgage rates are still holding close to historical lows and do not appear to be sparking undue panic among homebuilders as credit rating agency Moody’s recently predicted a positive outlook for the North American homebuilding and building materials markets in 2017.
Builder confidence in the market for new single-family construction posted its highest reading since July 2005 in December, which is considered a positive sign headed into the new year.
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- Freddie Mac Mortgage Rates Move Higher