For the first time in two months, mortgage rates finally increased instead of decreased, according to Freddie Mac’s Primary Mortgage Market Survey. The average 30-year, fixed rate loan now goes for 3.64%, up from 3.62% last week. At this time last year, it was 3.75%.
To understand why rates rose, we have to look at 10-year Treasury Bonds. Because world financial market achieved a bit more stability last month, demand for treasuries fell. This cause them to yield a bit more, which is turn rose mortgage rates. This has lead to home loans being historically inexpensive right now, and the expectation is for them to remain so for some time.
Freddie Mac Chief Economist Sean Beckettie said that “Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook and the market expects the Fed to refrain from any further short-term rate increases for now.”
It looks like low mortgage rates are here to stay for a while.