Data from Freddie Mac’s Primary Mortgage Market Survey released on Thursday showed fixed-mortgage rates in the U.S. edged higher for the third consecutive week, putting pressure on refinance momentum.
The 30-year FRM averaged 3.59 percent, compared to 3.51 percent last week. The 15-year FRM averaged 2.77 percent, compared to 2.69 percent last week. The five-year adjustable-rate mortgage averaged 2.63 percent, up from 2.62 percent last week, while the one-year ARM remained at 2.55 percent.
The trend could put pressure on refinance momentum, which would benefit credit unions because they see a significant amount of loans via mortgage refinancing.
“Higher rates may initially boost originations by drawing purchasers into the market and convincing those who haven’t refinanced to do so before rates increase further–in both cases a ‘get while the getting’s good’ response,” Mike Schenk, the vice president of economics & statistics for the Credit Union National Association, said. “We think most who can refinance have already done so, but also know there is a tremendous amount of pent-up demand, improving labor markets–higher confidence, higher incomes–and high affordability despite the rate increases.”
Mortgage rates, however, remain low, providing a boost to homebuyer affordability—which should help home sales and construction.
In April, single-family housing permits increased at the fastest pace since May 2008, and existing home sales increased the most since November 2009.
Home prices rose 1.9 percent from the fourth quarter during the first quarter of the year, the seventh quarterly price increase.