Mortgage rates were lower this week as US Treasury yields fell, but economic recovery could push them higher in the coming months.
Mortgage rates have fallen along with Treasury yields over the past seven days, keeping home loan rates below 3 percent for the second straight week, according to Freddie Mac’s weekly lender poll.
“While mortgage rates tend to be closely tied to Treasury bond yields, other factors can go a long way. such as labor markets, which continue to improve according to last week’s employment report, ” Freddie Mac chief economist Sam Hather said in statement… Economic growth is expected to push interest rates higher Hater said in the coming months that will make today’s near-record low rates an opportunity for home buyers and homeowners looking to refinance their loans.
During the week ending July 8, Freddie Mac’s weekly Initial research of the mortgage market Reported average rates for the following types of loans:
- For 30 year fixed rate mortgage, rates averaged 2.90 percent with an average of 0.6 points, up from 2.98 percent last week and 3.03 percent a year ago. Interest rates on 30-year loans hit an all-time low of 2.65 percent recorded in 1971 during the week ending January 7, 2021.
- Betting on Mortgage with a fixed interest rate for 15 years averaged 2.20 percent with an average of 0.7 points, up slightly from 2.26 percent last week but below 2.51 percent a year ago. The all-time low for 15-year fixed rate mortgages in records dating back to 1991 was also observed during the week ending January 7, 2021, when rates averaged 2.16 percent.
- For 5 Year Adjustable Rate Hybrid Mortgages (ARM) Treasury Indexed, rates averaged 2.52 percent with an average of 0.2 points, up from 2.54 percent last week and 3.02 percent a year ago. ARM’s 5-year loan rates hit a record low of 2.56 percent for the week ending May 2, 2013, according to Freddie Mac’s 2005 records.
The Freddie Mac study tracks conventional, eligible home loans for borrowers who have invested 20 percent and have excellent creditworthiness. Borrowers taking on larger loans, making lower down payments or having a lower credit rating can expect higher rates.
Tariffs temporarily rose in February and March, when markets reacted to inflation concerns. They have since come back down and about 3 percent remained. But rising house prices and rents can provoke inflation and forcing the Federal Reserve to cut its purchases of Treasuries and mortgage bonds, which could raise rates again.