Mortgage Rates Resume Upward Trend
June 15, 2018 | Dwell JC
This week mortgage rates resumed their upward trend, which is reported to be the most prolonged increase in 46 years. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average jumped to its second-highest level this year, rising to 4.62 percent with an average 0.4 point. It was 4.54 percent a week ago and 3.91 percent a year ago.
According to Sam Khater of Freddie Mac, “Mortgage rates so far in 2018 have had the most sustained increase to start the year in over 40 years. Through May, rates have risen in 15 out of the first 21 weeks (71 percent), which is the highest share since Freddie Mac began tracking this data for a full year in 1972.”
Interest rates are rising because the economy is heating up. As a result, the Federal Reserve on Wednesday lifted its benchmark rate by a quarter of a percentage point, the second hike this year. And a majority of policy makers said they now expect a total of four interest rate increases this year. Fed officials had been split about whether to raise rates three times this year or four.
“Mortgage rates drifted upward last week returning back to where they stood in mid-May before political turmoil in Italy and Spain and U.S.-China trade tensions pushed rates temporarily lower,” said Aaron Terrazas, senior economist at Zillow. “A steady stream of healthy economic data in the U.S. combined with signals from central banks around the world pointing toward slightly tighter monetary policy on a global scale reversed the recent slide in rates.
“The main takeaway is that the economy is doing very well,” Fed Chairman Jerome Powell said at a news conference. “Most people who want to find jobs are finding them, and unemployment and inflation are low.”
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