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Rates Climb Again: Washington Mortgage Rate Trends in February 2018

Mortgage rates in Washington State and across the nationagain this week, with the average rate for a 30-year fixed home climbing to 4.32%. That’s based on the weekly mortgage industry survey conducted by Freddie Mac. Just keep in mind that rates can vary from one borrower to the next, due to a number of factors.

Here’s an updated look at mortgage rate trends for Washington State, as of February 2018. We’ve also included a chart to help you visualize this latest upward trend in home loan rates.

Mortgage Rates Jump to Highest Point in Over a Year

On February 8, 2018, Freddie Mac reported the results of its latest survey of the mortgage industry.

mortgage timeline

And it will likely capture the attention of Washington home buyers and mortgage shoppers. According to the nationwide survey, the average rate for a 30-year fixed home loan rose to 4.32% during the week ending on February 8. That’s thehighest average since December 2016.

According to this latest report:

“The U.S. weekly average 30-year fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week. Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed. The 30-year fixed mortgage rate is up 33 basis points since the start of the year.”

The chart below shows average mortgage rates over the last year or so. As you can see, the average rate for a 30-year fixed mortgage bounced around below the 4% threshold for the latter part of 2017 and early 2018. Then it shot up by more than 25 basis points (0.25%) over a two-month period, leading up to this latest report for February 2018.

Blue is 30-year fixedGreen is 15-year fixed |  Orange is 5/1 ARM loan

Rate trends Feb 2018
Chart: Average mortgage rates | Source: Freddie Mac PMMS

This isn’t surprising to those who follow mortgage trends. Last year, many analysts and economists were predicting that lending rates would rise gradually during 2018. (We noted this in previous mortgage rate trend reports for Washington, including this one from December 22.)

What’s causing this upward trend? Several factors. Over the last year, the Federal Reserve has been gradually increasing the short-term federal funds rate. The Fed’s policy changes, along with general economic improvements, are partly what’s behind the uptick in mortgage rates.

But we’re getting into the economic weeds here. The bottom line is that mortgage rates in Washington State and nationwide had previously been hovering near historically low levels, due to stimulus measures other factors. And now rates are rising on a wave of positive economic news and stimulus reduction.

Housing Demand Still Strong Across Washington State

Historically, rising mortgage rates have often had a dampening effect on home-buying activity. But these are not normal times for the Washington State real estate market. There’s a shortage of available housing supply at present, which is boosting competition among home buyers. So far, the rising trend for mortgage rates in Washington (and nationwide) has not cooled the market much.appraisal sketch

The economic team at Freddie Mac echoed this in their latest report:

“Will higher rates break housing market momentum? It’s too early to tell for sure, but initial readings indicate housing markets are sustaining their momentum so far.”

On February 7, the Mortgage Bankers Association published the results of its latest home loan application survey. It showed that the purchase index (i.e., mortgage applications by home buyers) was roughly the same as a week before, and 8% higher than the same week a year ago.

Get a rate quote: Sammamish Mortgage has been serving borrowers in Washington State for more than two decades. We are a family-owned company offering competitive rates on many different loan products. Please contact us if you have financing questions or would like to receive a rate quote.

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