Mortgage rates ticked up slightly this week with opposing trends in the stock and bond markets fighting for dominance, according to Freddie Mac.
“We’re seeing a tug of war happen as the fixed-income market flashes warning signs while the equities market continues to march higher with optimism,” Sam Khater, Freddie Mac’s chief economist, said in a press release.
The bond market’s pessimism seems to be taking hold, as the 10-year Treasury yield — a benchmark for the 30-year fixed rate mortgage — dipped back below 2% on July 2 and remained there in the morning of July 3.
The 30-year fixed-rate mortgage averaged 3.75% for the week ending July 3, up from last week when it averaged 3.73%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.52%.
“The data suggests the economy is weakening, but is still on very solid ground with high consumer confidence and strong labor market. Closer to home, the housing market continues to slowly improve and gain momentum as we head into the second half of the year, which is good news and should keep the economy growing,” Khater said.
With mortgage rates remaining below 4% for a prolonged period, refinance activity has been on the rise. Even with this past week’s decline in refinance applications, they still made up more than half of the new business mortgage lenders received.
Meanwhile, the number of borrowers now in the money to refinance grew by 2.3 million in June from May, to a total of 8.24 million, a recent Black Knight report said.
The 15-year fixed-rate mortgage averaged 3.18%, up from last week when it averaged 3.16%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.99%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.45% with an average 0.4 point, up from last week when it averaged 3.39%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.74%.