The average commitment rate on a 30-year fixed-rate conventional mortgage rose to 3.87 percent, excluding fees, during the week ended May 28, 2015, up from 3.84 percent the week before. The last time rates reached this high was the week of December 31, 2014.
Still, by historical standards mortgage rates are still near their all-time lows. Rates are even significantly lower than they were a year ago at 4.12 percent.
The jump in rates was a result of positive news from the housing sector which boosted investor confidence. “Mortgage rates rose to the highest level in 2015 following positive housing market data,” said Freddie Mac Deputy Chief Economist Len Kiefer. “New home sales surged 6.8 percent to an annual pace of 517,000 units in April. Although existing home sales slipped 3.3 percent to a seasonally-adjusted pace of 5.04 million units, sales are up 6.1 percent on a year-over-year basis. The S&P/Case-Shiller 20-city home price index also posted a solid gain of 5 percent over the 12-months ending in March 2015.”
Even with existing home prices falling, American homebuyers were signing contracts at the fastest rates in almost nine years. Pent-up demand for housing is slowly being met by increasing inventory and the affordability of low interest rates.
The average rate on a 15-year fixed-rate mortgage also rose to a yearly high of 3.11 percent, up from 3.05 percent the previous week, a rate not seen since the last week of 2014. Rates are down from a year earlier when they averaged 3.21 percent.
One-year adjustable rate mortgage rates slipped, easing down to 2.50 percent from 2.51 percent the week before but were up from 2.41 percent the previous year.