Mortgage rates increased slightly for the second consecutive week, buoyed early on by positive economic news such as the jobs report that came out last Friday, according to Freddie Mac.
But that snapshot did not tell the full story of rate movements over the past week, according to comments from Zillow's own rate tracker released on Wednesday evening.
"Mortgage rates fell after wild fluctuations over the last seven days, thanks in large part to the Federal Reserve reinforcing their commitment to purchase large amounts of mortgage-backed securities," said Zillow economist Matthew Speakman. "Just last week, mortgage rates appeared to be trending upward, rising quickly from all-time lows to their highest level in just under a month. This increase followed the market's positive response to the better-than-expected May jobs data, but all that changed in the last few days."
"Some of this recent market optimism appeared to taper on Monday as markets considered the lasting ability of their recent rally. The big downward move in rates came on Wednesday as the Federal Reserve said they will keep overnight interest rates at zero through 2021 and, more importantly for mortgage rates, intend to maintain their recent pace of mortgage-backed security and Treasury purchases, putting an end to weekly reductions of this activity," he continued
"The announcement instantly increased demand for mortgage debt and pushed rates back down to long-term lows. With no end in sight for this Fed policy, it's likely that mortgage rates are poised to remain low for a while," Speakman said.
After the jobs report came out, the 10-year Treasury yield — used a benchmark for mortgage rates — climbed as high as 0.95%. It quickly came off that level, and there were some "wild fluctuations" it stayed above 8% until the Fed announcement. By midmorning Thursday, it was back in the 0.67% range,
"The rebound in homebuyer demand continued this week, driven by mortgage rates that hover near record lows," Sam Khater, Freddie Mac's chief economist, said in a press release. "This turnaround in demand, particularly by those who have higher incomes than the typical household, also reflects deferred sales from the spring."
The 30-year fixed-rate mortgage averaged 3.21% for the week ending June 11, up slightly from last week when it averaged 3.18%, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.82%.
The 15-year fixed-rate mortgage averaged 2.62%, unchanged from last week. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.26%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.1% with an average 0.4 point, unchanged from last week. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.51%.