Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year. The 30-year fixed-rate mortgage fell 4 basis points from a week ago to 3.95 percent in the year’s first survey. Despite increases in short-term interest rates, long-term interest rates remain subdued. The 30-year mortgage rate is down a quarter of a percentage point from where it was a year ago and the spread between the 30-year fixed and 5/1 adjustable rate mortgage is the lowest since 2009.
As expected, mortgage rates felt the effect of last week’s surge in long-term interest rates in the final, shortened week of 2017. The 30-year fixed mortgage rate increased 5 basis points to 3.99 percent in this week’s survey. Although this week’s survey rate represents a five-month high, 30-year fixed mortgage rates are still below the levels we saw at the end of last year and early part of 2017. Mortgage rates have remained relatively low all year.
For Week Ending December 16, 2017
It has been another steady year for buying and selling residential real estate. The primary trends of inventory decline and price increase continued, and more of the same is anticipated in 2018 if consumer, employer and builder confidence remain high. Tweaks in tax law and mortgage rates could create either unwanted or desirable effects, depending on the market. Trend lines may flatten or turn, but it’s too soon to say exactly what will happen.
In the Twin Cities region, for the week ending December 16:
For the month of November:
All comparisons are to 2016
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
“New tax legislation could have ramifications on housing.”
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30-year fixed mortgage rates have been bouncing around in a narrow 10 basis points range since October. The U.S. average 30-year fixed mortgage rate increased 1 basis point to 3.94 percent in this week’s survey. The majority of Freddie Mac’s Primary Mortgage Market Survey® (PMMS®) was completed prior to the surge in long-term interest rates that followed the passage of the tax bill. If those rate increases stick, we’ll likely see higher mortgage rates in next week’s survey. But even with yesterday’s increase, the 10-year Treasury yield is down from a year ago, and 30-year fixed mortgage rates are 36 basis points below the level we saw in our survey last year at this time. Mortgage rates are low.
