The average 30-year fixed-term mortgage rate declined for a second consecutive week, even as the most recent inflation data initially raised Treasury yields, causing consternation among some industry experts who say rate hikes might not be far off.
For the fourth week in a row, the 30-year fixed-rate mortgage remained under 3%, falling to 2.94% in the week ending May 13, from 2.96%
But government data released Wednesday showed annual
While the Federal Reserve has maintained that it does not intend to increase rates unless inflation stays at or above 2% for an extended period, the inflation news — along with
“In theory, a steep uptick in inflation would force the central bank to tighten policy by hiking interest rates or slowing the pace of bond purchases. But for now, Fed officials have downplayed the risks associated with Wednesday’s report, asserting that the sharp increase in prices will be temporary. Any shifts away from this outlook will place more upward pressure on mortgage rates,” he said.
With rates potentially on the rise, the window may be closing for many borrowers who aren’t taking advantage of current trends, Khater said.
“Low rates offer homeowners an opportunity to lower their monthly payment by refinancing, and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option,” he said.
Averages for the 15-year fixed-rate mortgage and 5-year Treasury-indexed hybrid adjustable-rate mortgage also decreased week over week. The 15-year rate fell to 2.26% from 2.3% percent the previous week. One year ago, the average came in at 2.72%.
The average of the 5-year Treasury-indexed hybrid adjustable-rate mortgage declined to 2.59% from 2.7% a week earlier, compared to a rate of 3.18% the same week in 2020.