Mortgage rates rise, boosted by improved housing market
Numbers for new residential construction came in better than expected, which temporarily pushed U.S. Treasury bond yields higher on Tuesday. Mortgage rates commonly move in the same direction as government bond yields.
Housing starts edge up
Housing starts in July were at an annual rate of 1.206 million units — a 0.2% increase over June, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. Last month’s rate is 10.1% higher than the July 2014 rate.
“The housing market is a leading light of the economy and it looks like that will be the case for a while,” says Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “Home construction edged up in July to a level not seen since the fall of 2007.”
Single-family housing starts were up 12.8% month over month, while multifamily starts fell 17.1%.
Additionally, homebuilder confidence has risen to a nearly 10-year high, the National Association of Home Builders reported earlier this week.
A look at this week’s rates
- The benchmark 30-year fixed-rate mortgage rose to 4.06% from 4.04%, according to Bankrate’s Aug. 19 survey of large lenders. A year ago, the rate was 4.24%. Four weeks ago, it was 4.12%. 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 rate has averaged 4.03%. This week’s rate is 0.03 percentage points higher than the 52-week average.
- The benchmark 15-year fixed-rate mortgage rose to 3.28% from 3.26%.
- The benchmark 30-year fixed-rate jumbo mortgage fell to 3.97% from 4%.
- The benchmark 5/1 adjustable-rate mortgage rose to 3.24% from 3.2%.
Posted on August 25, 2015 at 11:36 am by Ralph Schiavone