By Mark E. Ary
The average for a 30-year, fixed-rate mortgage continues to move notably higher over the last several weeks. Most noted factors are inflationary fears, global supply chain woes, and how the pandemic will continue to affect the economy today, and moving forward.
Florida – The 30-year fixed-rate mortgage (FRM) averaged over 3.05%, according to Freddie Mac’s weekly survey. We have easily moved from recent lows of 2.875% to over 3.0% in the last two weeks.
This is likely the beginning of an upward trend. The upward move appears to be partially a reaction to the latest commentary of Fed Chair Jerome Powell about the tapering of purchases of mortgage-backed securities (MBS) and collateralized mortgage obligations (CMO), and that inflation fears are not “transitory” and are likely to continue to hold through the 2nd quarter of 2022, which is pushing for the Federal Reserve to raise rates higher sooner than expected.
This can be seen when looking at the 10-year Treasury over recent weeks, and while mortgage rates do not follow the 10-year Treasury or the federal funds rate, they do loosely follow the trend of the 10-year Treasury yield, which as of yesterday has reached its higher level since the end of June.
Due to the recent shortage in the housing market, this will not likely affect purchases, as rates are still relatively low compared to recent years, it is likely this will start to have a larger impact on refinances as we move towards the end of 2021 and into 2022. However, it should not be discounted that these upward trends in mortgage yields and higher home values, will limit the options for would-be home buyers.
If you have any questions on this information regarding a new mortgage or refinance, or a reverse mortgage, reach out to us at Trust Mortgage, and we will be happy to guide you though the mortgage process, we’re here to help.