Mortgage rates remained unchanged this week, in the face of macroeconomic headlines which could have portended swings, according to Freddie Mac.
The 30-year fixed rate mortgage averaged 6.76% as of May 8. A
Meanwhile, the 15-year FRM declined 3 basis points to 5.89%,
It was not just the government-sponsored enterprise that noted this. Mortgage rates remained relatively flat as of 11 a.m. eastern time Thursday morning, compared with the prior day and week, Zillow said.
10-year Treasury moves in a different direction
Those measurements, however, did not track along with the 10-year Treasury yield, which is one of the benchmarks used to price mortgages. At that time on Thursday it was at 4.32%, up just under 5 basis points from its Wednesday close and from a 4.23% close on May 1.
On May 6, the first day of
Why mortgage rates ended the period flat
Movements, or ultimately the lack thereof, were influenced over the past seven days by
Its rate tracker had the 30-year fixed at 6.92%, unchanged from Wednesday, and up 1 basis point from the previous week's average of 6.91%.
"The Bureau of Labor Statistics employment report, released May 2, showed the labor market was more resilient than expected amidst a period of peak policy uncertainty in April," Ng said in a statement Wednesday evening, after the FOMC decision was announced. "With the unemployment rate holding steady, the Fed has the gift of time to see how government policies impact the economy before adjusting rates."
As a result of the news, mortgage rates first "rose a little then fell a little," with the net being almost no change, Ng said.
But lenders and consumers shouldn't rely on the current status quo.
"Economic uncertainty contributed to the standstill in both places," said Holden Lewis, home and mortgage expert at NerdWallet in a Wednesday statement, referring to mortgage rates during the period and the FOMC decision. "But uncertainty has another side to it: A bit of unexpected news could move mortgage rates swiftly in either direction."
Other rate trackers show some movement
However, the Lender Price product and pricing engine data posted on the National Mortgage News website recorded a big jump in the 30-year FRM, to 6.865% from 6.76% one week ago.
The latest data on the Optimal Blue website is for Wednesday, when the 30-year conforming FRM was at 6.76%. This was down from 6.818% on Tuesday but up from 6.709% on April 30.
"At this time last year, the 30-year fixed-rate mortgage was 30 basis points higher and purchase applications were declining," Sam Khater, Freddie Mac chief economist, said in a press release. "Today, rates are lower and have remained stable for weeks, sparking continued increases in purchase applications."
The impact on application activity
The Mortgage Bankers Association Weekly Application Survey released on Wednesday found
"Mortgage applications jumped 11% last week, the first gain in four weeks as slightly lower mortgage rates influenced borrower decisions," MBA President and CEO Bob Broeksmit said in a Thursday morning statement. "We expect this ebb and flow of demand to continue as long as mortgage rates remain volatile due to ongoing economic uncertainty."
Fed decision's impact on mortgage rates
In his May 7 comments on the FOMC decision and its impact on residential mortgage companies, Bose George of Keefe, Bruyette & Woods, maintained a higher for longer outlook on interest rates.
"We think mortgage rates will trend down modestly from their 6.76% level, but expect that rates will remain above 6% through year-end 2025," George said. "We also expect 10-year Treasury yields to trend down modestly and would anticipate some narrowing of spreads between agency mortgage-backed securities and Treasuries.
