Mortgage rates ticked higher for the first time this year, with the average 30-year, fixed rate loan going for 3.64 percent. Last week, the average rate was 3.62 percent and at this time last year it was 3.75 percent, according to Freddie Mac’s weekly survey. Loans are still way cheaper than they were in December, when the Federal Reserve raised its own short-term rates.
Why did rates go up? The market determines how much your home loan will cost, but mortgage costs generally follow the path of 10-year Treasury bonds. Treasuries have been falling as global investors pour money into the safety of government bonds. But the world’s financial markets caught their breath last month, meaning there was less demand for Treasuries. That pushed their yields up a pinch and mortgage rates followed suit.
But look — Treasuries ticked down again last week, which means mortgages might fall again, too.
No matter what happens, home loans are really cheap right now and will stay that way for a while.
“The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality,” Freddie Mac chief economist Sean Becketti said. “Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook and the market expects the Fed to refrain from any further short-term rate increases for now.”
Translation: Mortgage rates aren’t going anywhere anytime soon. Relax.