Rates for home loans crept higher as investors rotated out of safe-haven assets. But with the housing market seemingly out of steam, supportive credit conditions may not be much help for many consumers.
The 30-year fixed-rate mortgage averaged 4.52% in the Aug. 30 week, according to Freddie Mac’s weekly survey, up one basis point after touching its lowest point since mid-April. The 15-year fixed-rate mortgage, meanwhile, averaged 3.97%, down from 3.98%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.85%, up three basis points.
Those rates don’t include fees associated with obtaining mortgage loans.
Bond prices have been under pressure over the past week, as reports of progress on trade deals and a possible German lifeline for the Turkish currency crisis weakened demand for safe-haven assets. Bond yields rise when prices fall. Mortgage rates follow the trajectory of the benchmark 10-year Treasury note TMUBMUSD10Y, -0.76% .
Read: We’re probably at peak housing. Here’s what that means.
Meanwhile, momentum in the housing market is waning. Sales of previously-owned homes fell to the lowest in more than two years in July, the fourth-straight monthly decline. In the new-home market, sales conditions are broadly better, but a ratio that measures inventory rose in July to one of its highest post-crisis readings.
In another sign of the shift from a seller’s market to one favoring buyers, Americans may be trying a little less diligently to become homeowners. A company called ShowingTime, which enables appointments for buyers to tour homes for sale, developed an index that aggregates traffic information based on those showings. That index was basically flat in July compared to a year ago, the company said.
So far this year, mortgage applications to purchase homes have averaged 3.6% higher than the same period in 2017, according to data provided to MarketWatch by the Mortgage Bankers Association. (Mortgage applications to refinance are, on average, 17.5% lower.) The chart above shows MBA’s index of purchase applications. Even though it shows applications trailing off over the past few weeks, they’re still higher than year-ago levels.
Read: Refinancings haven’t been so scarce since Lehman Brothers imploded
