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Mortgage Rates Hold Steady into the Holiday Weekend

September 2, 2018

By Kathy Orton

The Washington Post

Mortgage rates were essentially flat this week, halting the 30-year fixed rate’s three-week slide.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average moved higher for the first time in nearly a month, rising to 4.52 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.51 percent a week ago and 3.82 percent a year ago.

The 15-year fixed-rate average slipped to 3.97 percent with an average 0.5 point. It was 3.98 percent a week ago and 3.12 percent a year ago. The five-year adjustable rate average rose to 3.85 percent with an average 0.3 point. It was 3.82 percent a week ago and 3.14 percent a year ago.

“Mortgage rates drifted upward over the past week as financial markets rallied on news that the United States and Mexico have agreed to the broad outlines of a new trade agreement,” said Aaron Terrazas, senior economist at Zillow. “A new agreement would boost long-term growth above the expected growth if the existing trade agreement ended. The trade-related upward momentum was tempered by comments from Federal Reserve Chair Jerome Powell at the Kansas City Fed’s Jackson Hole conference that suggested a more measured pace of rate increases, and more soft housing data. Financial markets are typically quiet going into the Labor Day holiday, but that could change next week with several high-profile Fed speeches on the calendar for Tuesday and Wednesday.”

Bankrate.com , which puts out a weekly mortgage rate trend index, found that close to half the experts it surveyed say rates will remain relatively stable in the coming week. Elizabeth Rose, sales manager at Nations Lending, is one who predicts rates will hold steady.

“After a brief rally, mortgage bonds have moved back into a sideways to lower pattern,” Rose said. “Minus any surprises on the trade talks, mortgage rates should remain unchanged.”

Jim Sahnger, mortgage planner at C2 Financial, disagrees. He expects rates to go up.

“Rates have been pretty stable this quarter and, while I say [they] will be higher next week, I don’t expect by much,” Sahnger said. “We have a lot of data, including the employment report, on the horizon and traders may be looking to protect themselves going into the release of the data. Couple that with trade talks opening up and the environment for bonds and interest rates could get a little heated.”

Meanwhile, mortgage applications declined, according to the latest data from the Mortgage Bankers Association. The market composite index -- a measure of total loan application volume -- decreased 1.7 percent from a week earlier. The refinance index fell 3 percent from the previous week, while the purchase index slipped 1 percent.

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