Mortgage Rates Reach Seven-Year High

In May, mortgage rates reached a seven-year high. Rates for home loans were the highest since 2011. Along with rising mortgage rates, low supply and soaring prices put a strain on the current housing market.

Freddie Mac reported the 30-year fixed-rate mortgage averaged 4.61 percent in mid-May. That marked the highest jump for the product since May 2011.

During the week of May 17, 2018, the 15-year fixed-rate mortgage averaged 4.08 percent, an increase of 7 basis points. During the same week, the 5-year Treasury-indexed hybrid adjustable-rate went up to 3.82 percent from 3.77 percent.

Mortgage rates follow the path of the U.S. Treasury Note. The Treasury Note was at its highest since 2011. Investors are starting to sell bonds again in response to this increase.

While rates are higher, the 30-year fixed rate mortgage is still much lower than its long-time average. However, home prices are rising faster than incomes.

Sam Khater, Freddie Chief Economist, said, “The prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

Low home inventory, rising home prices, and increasing mortgage rates change the marketplace for prospective buyers. With mortgage rates at a seven-year high, investors and buyers are watching the numbers for the remainder of 2018.

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In this issue:

Why Buying a Home in 2018 Could be a Smart Move

Five Fastest Selling Cities for Residential Real Estate

Almost Half of Freddie Mac Mortgages in Q1 Borrowed by First-Time Home Buyers

Slow Sales at Home Depot Signal Warning for Housing

Homeowners Gain $1 Trillion in Home Equity

Homeownership Trends Upward as Renter Households Decline

Mortgage Rates Reach Seven-Year High

New Home Prices Decline to 12-Month Low

The Best Cities for Housing Market Purchasing Power

Helping Clients Celebrate Their New Home Purchase on Social Media

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