Mortgage rates stall on mixed economic signal
Mortgage rates barely moved this week after volatile government bond yields and mixed news about the economy made headlines.
The bond yield roller coaster
Treasury yields fell to a 2-month low this week in response to disappointing economic data, but have since reversed course.
The 10-year Treasury yield closed at 2.15 percent Monday and bounced back to 2.27 percent by Wednesday afternoon.
Overall construction spending rose a measly 0.1 percent from May to June, the U.S. Census Bureau said Aug. 3. That’s the smallest increase seen in five months. Residential construction rose 0.4 percent, however.
Consumer spending increased 0.2 percent in June compared with 0.7 percent in May, according to the latest report from the Bureau of Economic Analysis.
September rate hike ‘appropriate’?
Treasury yields started moving higher after the Atlanta Federal Reserve’s president hinted that there’s still a chance the central bank will increase the federal funds rate in September.
“My priors going into the (September) meeting as of today are that the economy is ready and it is an appropriate time to make a change,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, told The Wall Street Journal on Aug. 4.
A look at this week’s rates
• The benchmark 30-year fixed-rate mortgage rose to 4.1 percent from 4.09 percent, according to Bankrate’s Aug. 5 survey of large lenders. A year ago, the rate was 4.29 percent. Four weeks ago, it was 4.14 percent. The mortgages in this week’s survey had an average total of 0.24 discount and origination points. Over the past 52 weeks, the 30-year fixed rate has averaged 4.03 percent. This week’s rate is 0.07 percentage points higher than the 52-week average.
• The benchmark 15-year fixed-rate mortgage rose to 3.28 percent from 3.27 percent.
• The benchmark 30-year fixed-rate jumbo mortgage fell to 4.02 percent from 4.05 percent.
• The benchmark 5/1 adjustable-rate mortgage rose to 3.24 percent from 3.22 percent.
Housing market maintains momentum
National home prices increased 6.5 percent from June 2014 to June 2015, and were up 1.7 percent from May, according to a CoreLogic report. Additionally, there was close to five months’ worth of housing inventory last month.
CoreLogic predicts that home prices will have increased 0.6 percent from June to July 2015 and will be up 4.5 percent from June 2015 to June 2016.
Mortgage applications jumped 4.7 percent last week compared with a week prior, according to the Mortgage Bankers Association’s weekly survey. Purchases and refinances increased 3 percent and 6 percent, respectively.