Mortgage News Daily recently reported that mortgage rates experienced a significant increase in the past week, and the upward trend may continue into next week. The rate offerings are the highest they’ve been in seven years, with the most prevalent top-tier rate coming in around 4.875%.
The Upward Trend
This basically means that the average 30-year fixed rate quote jumped an eighth of a percentage point (.125%) with in a week. We haven’t seen an increase like that in some time and definitely nothing like it in 2018. However, mortgage experts like myself have predicted this upward trend throughout this year. We’ve seen steady increases, but this quick hike is somewhat alarming after several months of the rates cooling back down after surges earlier in the year.
Why the Rate Increase?
The new tax bill and ongoing economic expansion/inflation have contributed to these increases in mortgage interest rates. The 10-year Treasury yield is another indicator. Other than in May 2018 when it reached 3.13%, the yield has held below the target 3% ceiling. That ceiling is being threatened again with these latest rate moves.
What This Means for Lenders and Consumers
From a mortgage lending perspective, it creates a sense of urgency to lock in long-term interest rates for borrowers before they increase again. There’s always a chance of the trend reversing back downward, but the signs don’t point to that happening any time soon. If you’ve been waiting to buy or lock in a decent rate on your loan, you probably will not want to wait.
As of Wednesday September 19, 2018, the most prevalent rates were as follows:
- 30-Year Fixed – 4.875%
- FHA/VA – 4.5/4.625%
- 15-Year Fixed – 4.375%
- 5-Year ARMs – 4-4.25%
Studying the Rate Movement
Naturally, I will be keeping a very close eye on these rate trends in the coming weeks. If you have questions about what these rate increases (or any possible decreases in the future) mean and how they will affect your ability to buy or refinance, I am happy to provide any answers you need.
It’s not too late to take action and lock in a good rate, so call Transparent Mortgage at (619) 929-0199 or email me at firstname.lastname@example.org for a no-obligation mortgage consultation where we can review your specific financial situation and discuss your best loan options.