By Janna Herron • Bankrate.com
Mortgage rates floated higher this week after the Federal Reserve signaled that at least one interest rate hike is on its way later this year. The uptick comes as the housing market’s momentum strengthens.
“We’re seeing rates tick up a little bit, but it doesn’t seem to be affecting people’s appetite to borrow,” says David Cary, a mortgage broker at C2 Financial Corp. in the San Francisco Bay Area. “People are getting the sense that rates are going to move higher, and sometimes when that becomes the consensus view, that’s when they take action.”
The volume of mortgage applications edged up 1.6% last week from the previous one, according to the Mortgage Bankers Association on June 24. Refinances were up 2%, while purchases gained 1%. Purchases, though, are a healthy 18% higher year over year.
“Demand is pretty healthy for jumbo refinancing and purchases,” Cary says. He notes that refinances were largely debt consolidations or borrowers wanting to lock in a fixed rate from a five- or seven-year adjustable loan. “Maybe the rate isn’t better than what they have, but they get a longer fixed term.”
The benchmark 30-year fixed-rate mortgage rose to 4.16% from 4.13% last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.28%. Four weeks ago, it was 4%. The mortgages in this week’s survey had an average total of 0.25 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.05%.
This week’s rate is 0.11 percentage points higher than that 52-week average.
The benchmark 15-year fixed-rate mortgage was unchanged at 3.35%.
The benchmark 5/1 adjustable-rate mortgage rose to 3.26% from 3.22%.
The benchmark 30-year fixed-rate jumbo rose to 4.21% from 4.14%.
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