After weeks of mortgage rates inching up or down at the pace of a sleepy snail, it finally happened. In the span of seven days, 30- and 15-year fixed-rate mortgages jumped up along with 5-year adjustable rate mortgages. This can all be seen on Freddie Mac’s Primary Mortgage Market Survey this week and the graph associated with this blog. So mortgage rates have taken a strong jump upward. How strong of a jump? If this rate jump played basketball, it would be going head to head with LeBron at tip off. If this rate jump were fighting Bruce Lee, it would easily avoid his leg sweep. If this rate jump were any Australian animal, it’d be a kangaroo. Well that last one was a bit obvious, but as you can see, this unexpected escalation in the rates is nothing to ignore. Take a look at the raw numbers from Freddie Mac:
30-year fixed-rate mortgage (FRM) averaged 4.46% with an average 0.8 point for the week ending June 27, 2013, up from last week when it averaged 3.93%. Last year at this time, the 30-year FRM averaged 3.66%.
15-year FRM this week averaged 3.50% with an average 0.8 point, up from last week when it averaged 3.04%. A year ago at this time, the 15-year FRM averaged 2.94%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08% this week with an average 0.7 point, up from last week when it averaged 2.79%. A year ago, the 5-year ARM averaged 2.79%.
1-year Treasury-indexed ARM averaged 2.66% this week with an average 0.5 point, up from last week when it averaged 2.57%. At this time last year, the 1-year ARM averaged 2.7%.
That’s right, 30- and 15-year fixed-rate mortgages rose an average 0.8 points with the 5-year ARM not far behind with an average 0.7 points. According to Freddie Mac, this is the largest weekly jump for the 30-year fixed since the week of April 17, 1987. The sky isn’t falling. However, with a rate jump that would make amateur trampoline gymnasts tremble, consider refinancing or locking in a low mortgage rate now. For additional information on this week’s mortgage trends, read this quote from Frank Nothaft, vice president and chief economist of Freddie Mac.
“Following Fed chief Bernanke’s remarks on June 19th about the possible timing of reduced bond purchases, Treasury bond yields jumped over the week and mortgage rates followed. He indicated that the Fed may moderate the pace of its buying later this year and end the purchases around the middle of 2014.
“Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong. For instance, existing home sales in May rose to its strongest pace since November 2009 and new home sales were the most seen since July 2008. In addition, the 12-month growth in the S&P/Case-Shiller® 20-city home price index for April of 12.1% was the largest since April 2006.”
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