WASHINGTON (5/24/13)--Fixed-mortgage rates in the U.S. are trending higher for a third consecutive week, putting pressure on refinance momentum, according to Freddie Mac's Primary Mortgage Market Survey released Thursday.
That could help credit unions, which get a good amount of loans from mortgage refinancings. "Higher rates may initially boost originations by drawing purchasers into the market and convincing those who haven't refinanced to do so before rates increase further--in both cases a 'get while the gettin's good' response," Mike Schenk, vice president of economics & statistics for the Credit Union National Association, told News Now.
"We think most who can refinance have already done so, but also know there is a tremendous amount of pent-up demand, improving labor markets--higher confidence, higher incomes--and high affordability despite the rate increases," he added.
Despite the upward trend, mortgage rates remain low, helping to keep home-buyer affordability high, which should further aid home sales and construction in coming weeks, Freddie said.
"Fixed rates moved up for the third consecutive week, with the average 30-year fixed-rate mortgage (FRM) about a quarter-percentage point higher than three weeks ago," said Frank Nothaft, Freddie Mac vice president and chief economist. "While this may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks.
"For instance, in April, single-family housing permits rose to the strongest pace since May 2008 while existing home sales for the same month grew the most since November 2009," he added. "Moreover, the National Association of Realtors reported that the median number of days on the market for these sales fell from 62 to 46 days, the fewest since it began collecting the data in May 2011."
The survey revealed this new information:
Borrowers may still pay closing costs which are not included in the survey, Freddie said.
In a related matter, U.S. house prices rose 1.9% in the first quarter, from the fourth quarter 2012, according to the Federal Housing Finance Agency (FHFA) House Price Index. This is the seventh consecutive quarterly price rise in the purchase-only, seasonally adjusted index. To read the FHFA release, use the link.