Mortgage interest rates did not continue to dip as expected following the
The conforming 30-year fixed-rate mortgage interest rate rose to 6.12% on Oct. 3, up from 6.08% the previous week, as reported in Freddie Mac's Primary Mortgage Market Survey. A year ago, the 30-year FRM averaged 7.49%.
This increase of 4 basis points can be attributed to geopolitical tensions and a rebound in short-term rates, said Sam Khater, Freddie Mac's chief economist, in a press release.
This indicates that "the market's enthusiasm on rate cuts was premature," he added.
The 15-year fixed-rate mortgage also saw a rise, climbing 9 basis points to 5.25%, up from 5.16% last week. This time last year, the 15-year loan averaged 6.78%.
Some industry experts had anticipated that the Fed's rate cut might
"The immediate impact of the cut is not mortgage-rate friendly, as bond yields have jumped higher," she said.
However, Khater remains optimistic about the future for homebuyers.
"Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise," he noted. "As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year."
Despite recent uptick in rates, purchase activity has seen an increase, the Mortgage Bankers Association's
The trade group's unadjusted purchase index increased 1% compared to a week prior. It was 9% higher than the same week one year ago.
Though rates increased, they remain much lower than earlier this year, said Bob Broeksmit, MBA's CEO, in a statement Thursday.
"These lower mortgage rates – along with rising inventory levels – are giving potential buyers more confidence to enter the market," Broeksmit added.
