Mortgage rates have shown a slight bit of movement in recent months. The average 30 year fixed-rate mortgage has had a marginal increase up to 3.47%. However, regardless of the uptick, average rates are still hovering at all time lows.
“This week, the 10-year Treasury yield continued its climb as an increasing number of financial market participants foresee a December rate hike after a series of positive economic data releases,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year fixed-rate mortgage moved up 5 basis points to 3.47 percent in this week’s survey, the first increase in one month. Even though we’ve seen economic activity pick up, consumer price inflation and implied inflation expectations remain below the Federal Reserve’s 2 percent target.”
Freddie Mac reported the following national averages as of the middle of October:
- 30-year fixed rate mortgage: averaged 3.47% up from 3.42%. As of this time last year the average was 3.82%
- 15-year fixed rate mortgage: averaged 2.76% up from 2.72%. As of this time last year the average was 3.03%.
- 5- year hybrid adjustable rate mortgage: averaged 2.8% up from 2.80%. As of this time last year the average was 2.88%.
Rates have been remaining at all time lows throughout 2016, but mortgage applications have seen some ups and downs in their activity. The limited inventory of housing stock has caused some stalls as some consumers haven’t felt that it was necessary to apply for a mortgage until the inventory levels change.
Goldman Sachs has provided some positive information about the situation via a recent report. This study includes positive states of the economy including:
- Soft residential investment in Q2 likely reflected influence from a warmer winter across the country that pushed activity forward.
- Growth in private residential investment still remains at 5.7% year-over-year in Q2, largely above potential GDP growth.
An interesting statistic was that the report informed that the National Association of Home Builders’ index had elevated to 65 in September where it had reached its highest level during this economic recovery. The report also states that new single-family home sales have expanded 21% over 2015 and are approaching the 4th quarter of 2007 levels.
As household balance sheets remain healthy and the labor market continues to advance and progress, Goldman Sachs says it believes the “fundamentals of the housing recovery remain solid.”