After nearly two months of declines, mortgage rates slowly rose this week.
Freddie Mac’s Primary Mortgage Market Survey (PMMS) indicated the normal 30-year fixed home loan rate expanding from an average of 3.78 percent to 3.83 percent. This is the first time rates have expanded in nearly seven weeks, disrupting the enduring decay that started after rates beat July’s 4 percent.
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Context is significant here — mortgage rates stay at memorable lows regardless of five Fed rate climbs since December 2015. Freddie’s normal rate in the year 2000 was 8.1 percent, while the normal rate in 2006, directly before the housing crisis, was 6.4 percent.

“My first reaction is that even with the increase, rates are 20 basis points or more lower than the experts predicted them to be at the end of the third quarter,” explained Steve Cook, real estate communication consultant at commsconsulting.com. “Despite the Fed’s planned increases in the Federal Funds Rate, I think mortgage rates will remain hovering around 4 percent in the near future, as they did after last year’s modest increase.”
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Low rates mean high purchaser request, however the National Association of Realtors’ (NAR) existing-home deals in any case declined 1.7 percent to a regularly balanced yearly rate (SAAR) of 5.35 million in August (down from 5.44 million in July), and the current month’s business pace is the most minimal found in a year.
The offenders? Low inventory and rising home prices.
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“Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,” NAR Chief Economist Lawrence Yun has stated.
Cook agrees: “My bottom line on home sales is that the three-year inventory drought, which has cut supplies by 40 percent or more over the past three years in some markets, is a much greater threat to sales than mortgage rates,” he said in an emailed statement to Inman. “As the latest existing home sales report confirms, millennials aren’t going to buy if they can’t find the homes to buy,” he added.

THIS WEEK’S MORTGAGE RATES
• 30-year fixed-rate mortgage (FRM) averaged 3.83 percent with an average 0.5 point for the week closing September 21, 2017, a boost from last week when it averaged 3.78 percent. A year previously during this time, the 30-year FRM averaged 3.48 percent.
• 15-year FRM this week averaged 3.13 percent with an average 0.5 point, a rise from last week when it averaged 3.08 percent. This time, a year previously, the 15-year FRM averaged 2.76 percent.
• 5-year Treasury-indexed hybrid flexible-rate mortgage (ARM) averaged 3.17 percent this week with an average 0.4 point, a rise from last week when it averaged 3.13 percent. A year prior at this time, the 5-year ARM averaged 2.80 percent.