Mortgage rates stayed just below the 4% mark throughout the month of June, according to data collected by Freddie Mac. The 30-year fixed-rate mortgage ended June at an average of 3.88%.
The month began on a low note; the average 30-year fixed-rate mortgage fell from 3.94% during the final week of May to 3.89% during the first week of June.
Economic data activity was slow at this time, with little news for investors to base their actions on. As such, most eyes were turned toward former FBI Director James Comey, who spoke to the nation about his final few weeks with the bureau. NerdWallet commented this event may have been the only impetus for changing rates during the first week of June.
However, things quickly changed as the scheduled FOMC meeting was held on June 13-14. As expected the Fed voted to increase the federal funds rate, which now stands as a result at a range of 1% to 1.25%.
The increase is a clear indication of Fed Chair Janet Yellen and her colleagues' confidence in the American economy and its future. Citing strong job growth and a low unemployment rate - a reported 4.3% in the May jobs report - Yellen noted that she and her fellow committee members believe this is a step in the right direction toward their long-held goal of 2% inflation.
Data reported by Freddie Mac the following day showed the average 30-year fixed-rate mortgage ticked upward to 3.91%.
Treasury yields have been on the rise, which typically translates to higher mortgage rates. Though rates fell during the final week of June, Freddie Mac pointed out that this trend may soon reverse and push the cost of obtaining a residential mortgage higher.
In fact, 43% of industry experts who responded to Bankrate's Rate Trend Index survey said they believe the cost of a mortgage stands to rise in the first week of July. The remaining 57% said they'll stay steady through the holiday weekend.
Meanwhile, home prices are continuing to increase. According to the National Association of Realtors' pending home sales report for May, home prices are expected to increase about 5% this year. Though there's plenty of demand, limited options are inspiring bidding wars that quickly escalate costs.
For prospective homebuyers, obtaining an affordable mortgage could be their best bet at making a cost-effective home purchase. To learn about what options you have, reach out to Academy Mortgage.
Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.