Mortgage rates increased slightly this week on news that the Federal Reserve is likely to decide to raise short-term rates in June, according to Freddie Mac’s Primary Mortgage Market Survey.
During the week ended May 26, the average rate for a 30-year, fixed-rate mortgage (FRM) was about 3.64%, up from 3.58% the previous week. A year ago at this time, the 30-year FRM averaged 3.87%.
The average rate for a 15-year FRM was 2.89%, up from 2.81%. A year ago at this time, the 15-year FRM averaged 3.11%.
The average rate for a five-year, Treasury-indexed, hybrid adjustable-rate mortgage (ARM) was 2.87%, up from 2.80%. A year ago, the five-year ARM averaged 2.90%.
“U.S. Treasury yields moved up in response to the Fed minutes release, which kept alive the possibility of a summer rate hike,” says Sean Becketti, chief economist for Freddie Mac, in a statement. “Mortgage rates followed, with the 30-year, fixed-rate mortgage increasing six basis points to 3.64 percent. Despite this increase, May ends the month averaging only 3.60 percent, one basis point below April’s average and the lowest monthly average in three years. Home buyers are taking advantage of these historically low rates, with April’s new-home sales increasing by 16.6 percent – the fastest pace since January 2008.”