Though mortgage rates are still very attractive, the streak is over. According to Freddie Mac’s weekly survey of more than 100 mortgage lenders, conventional 30 year fixed rate mortgages increased by five (5) basis points (0.05%) from a week ago. Interest rates rose to 3.52 percent, on average nationally.
It breaks a winning streak in which interest rates were at or below 3.5 percent over the last 16 weeks.
You have to go back to late-2012 where for 19 consecutive weeks interest rates were lower.
Rates are still not high by any means, but it does appear that an upward trend in rates is upon us. For the last few years, we have warned of an impending rise in mortgage rates; now it appears it’s here.
Will the trend for rising mortgage rates continue?
Yes, if the following occurs.
U.S. employment continues showing steady growth.
Wage growth continues to climb.
Fears of inflation. Growth in wages sound good, but rising pay among U.S. workers could upset the market due to fears of inflation which will be bad for mortgage interest rates.
For now, interest rates are still 40 basis points below levels seen at the beginning of the year. At that time we were told by many analysts to expect mortgage rates in the 4.5 percent range at this period of the year.
Mortgage rates are still a full percentage point below that. How long will that last? Who knows?