Positive news on China, Brexit pushes average mortgage rates up
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“Even with a substantial dose of economic data and news over the past seven days, geopolitical developments once again had the greatest impact on rates,” said Zillow economist Matthew Speakman when that company released its own rate tracker. “Easing concerns surrounding Brexit and the U.S.-China trade tensions, the two major geopolitical stories of the past year, pushed mortgage rates higher on Monday. But this upward momentum will likely be curtailed after the Federal Reserve announced a third cut to the federal funds rate this year.”
“Purchase activity continues to show strength, indicating obvious homebuyer demand,” Sam Khater, Freddie Mac‘s chief economist, said in a press release. “However, the lack of housing supply remains a major barrier to not just the housing market, but the overall economic recovery.”
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.43% with an average 0.4 point, up from last week when it averaged 3.4%. A year ago at this time, the five-year adjustable-rate mortgage averaged 4.04%.
The next likely move for mortgage rates over the short term is to trend downward, Speakman said.
“As usual, bond yields reacted less to the announcement and more to the statement that followed in which Chairman Jerome Powell stated that it would take a significant uptick in inflation before the Fed would consider future rate hikes,” Speakman said. “Bond yields reacted by turning downward and mortgage rates are likely to follow suit in the coming days. Looking ahead, more blockbuster economic data releases are due in the coming week, most notably Friday’s November jobs report, suggesting that more mortgage rate movements are on the way.”