The average long term fixed mortgage rates went up this week as the housing market slowed down a little. The average 30-year interest rates went up to reach 4.33 percent from the 4.27 last week, according to Freddie Mac's Primary Mortgage Market Survey (PMMS).
While the average 30-year rates saw a 0.6 percent increase, the average 15-year mortgage rates also went up to 3.39 percent from last week's 3.3 percent. The average adjustable 5-year rate was unchanged this week at 3.03 percent.
Mortgage rates have risen a full percentage since hitting record lows last year. Rates started picking up pace last month after Janet Yellen, the Federal Reserve chair hinted at raising short term interest rates and went ahead with the third round of its bond-buying scheme reduction.
This week's increase is attributed to the soft housing market data.
"Mortgage rates edged up following the uptick in the 10-year Treasury note late last week. Existing home sales were essentially flat with a 0.2% decline in March to a seasonally adjusted annual rate of 4.59 million. However, new home sales fell nearly 15% in March to an annual rate of 384,000; well below consensus," Frank Nothaft, vice president and chief economist at Freddie Mac, said in a statement.
Just recently, The National Association of Home Builders revealed the housing trend report for the month of March. The report underscored a fall in existing home sales, a slight rise in prices and growth in inventory.
Experts believe that mortgage rates will continue to rise as the demand and supply equation in the housing market is still imbalanced. About 50 percent of the industry analysts believe that rates will only go further up in the coming weeks, according to a poll conducted by Bankrate.com.
While the rise in the mortgage rates may affect the ordinary home buyer, the rates are still low for luxury home buyers. At the moment, when prices of luxury properties are only shooting north, more lenders are offering jumbo mortgage loans. New regulations are also having no effect on the rates, according to The Wall Street Journal.
