This is getting ridiculous: Mortgage rates have risen eight weeks in a row.
Bankrate has been tracking mortgage rates every week since September 1985. It is only the fourth time that the 30-year fixed has risen eight weeks in a row. It happened in 1987 and 2004, and the benchmark rate went up for nine weeks in a row from September to November 2005.
Mortgage rates have gone up more than three-quarters of a percentage point since late September. This week, the 30-year, fixed-rate mortgage is at its highest level since September 2014.
Why this streak matters
There are still more than 1.5 million homeowners who would benefit from refinancing, according to the Urban Institute. That’s roughly the number of homeowners who could reduce their mortgage rates by at least three-quarters of a percentage point.
But the long rate increase has locked out about 3 million homeowners who could have reduced their rates by that much, if only they had refinanced three months ago.
“The rise in interest rates means significantly fewer mortgages are going to be originated because we’re going to choke off refinancing activity,” says Laurie Goodman, co-director of the Urban Institute’s Housing Finance Policy Center. According to the think tank, about 45 percent of homeowners could have benefited by refinancing earlier this year; now that applies to about 16 percent.
The sustained rise in mortgage rates took housing economists by surprise. A couple of months ago, many of them were predicting the 30-year, fixed-rate mortgage would be around 4.25 percent at the end of 2017. That happened about a year ahead of schedule.
“We reached that quickly, didn’t we?” said Michael Becker, branch manager for Sierra Pacific Mortgage.
Mortgage rates this week
The benchmark 30-year, fixed-rate mortgage rose this week to 4.31 percent from 4.18 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.12 percent. Four weeks ago, the rate was 4.10 percent.
The last time the 30-year, fixed rate was higher was Sept. 17, 2014, when it averaged 4.33 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.24 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.79 percent. This week’s rate is 0.52 percentage points higher than the 52-week average.
■ The benchmark 15-year, fixed-rate mortgage rose to 3.56 percent from 3.42 percent.
■ The benchmark 5/1 adjustable-rate mortgage rose to 3.56 percent from 3.45 percent.
■ The benchmark 30-year, fixed-rate jumbo mortgage rose to 4.36 percent from 4.19 percent.
In Bankrate’s Sept. 28 survey, the 30-year fixed averaged 3.54 percent — just above the record low of 3.5 percent. Since then, the benchmark rate has risen 77 basis points. A basis point is 0.01 percentage point.
Lock rates pronto
With mortgage rates on an upward march for two solid months, most loan officers have pleaded with borrowers to lock their rates as soon as they can.
That has been good advice, and it still is.
Sure, rates could fall next week or the week after — but they also could keep rising.