By Peter McDougall, sbup
After falling for nearly three straight months, interest rates on 30-year fixed rate mortgages (FRMs) inched upwards for the third week in a row this past week. Rates are still relatively low compared to historic levels, however, so there’s still time to apply for a new mortgage at an affordable rate.
Mortgage interest rates respond to a number of factors in the economy, but they tend to chart the same rise and fall as yields on 10-year U.S. Treasuries. Concerns over growing economic instability made government bonds a relative safe haven for concerned investors. "The flight to safety in light of the ongoing crisis pushed Treasury prices up and yields down," explains Philip van Doorn, senior banking analyst at manybanking.com. "Fear of inflation, with all of the borrowing and spending by the federal government, is one of the factors causing the bounce-back over the past few weeks, so it's not surprising that mortgage rates would spike too."
Interest rates on 30-year FRMs averaged 5.53% this week, up from 5.39% last week, according to the manybanking.com Rate Index. Interest rates on 15-year FRMs actually dropped slightly, averaging 5.29% this week, down from 5.36% last week. Rates on both 15- and 30-year mortgages are up significantly from their mid-January lows.
Despite the jump in rates, mortgage applications increased last week compared to the previous week, according to the Mortgage Bankers Association. Refinance activity still accounts for almost three-quarters of the mortgage activity, as homeowners continue to take advantage of these lower rates.
If you’re thinking about buying a new home or refinancing an existing mortgage, find out where interest rates stand in your area. Enter your ZIP code at manybanking.com to see mortgage offers from lenders near you. For instance, Colorado residents can apply for a 30-year FRM with an 6.03% APR from KeyBank (Quote: KEY). Meanwhile, 30-year mortgages are available to Arizona residents with a 5.771% APR from Bank of America (Quote: BAC). Wisconsin residents can apply a 30-year FRM at 6.07% from U.S. Bank (Quote: USB).
For more on mortgage rates and refinancing from manybanking.com:
“Rates are down, time to shop around”
“Wheeling and dealing for better refinance rates”
“A recovering economy could mean higher rates”