Mortgage rates increased for the fifth week in a row, according to Bankrate’s weekly survey of lenders. The 30-year fixed-rate mortgage climbed 6 basis points to 4.44 percent, hitting its highest mark since March 2017.
While an increase in mortgage rates may curb the enthusiasm of homebuyers who may not qualify for the best rates, the recent rise in the Mortgage Bankers Association’s Mortgage Credit Availability Index could be a boon to homebuyers who may not have otherwise qualified to get a mortgage.
Credit availability saw an across-the-board increase in January, effectively reversing the declines seen in December.
“Jumbo credit programs rebounded most strongly and reached a new series high, driven by an increase in the number of programs with reduced documentation requirements. In government lending programs, credit availability remains somewhat lower than the rest of 2017,” said MBA Vice President of Research & Economics Lynn Fisher.
The loosening of restrictions by some underwriters is well-timed for the expected Fed rate hike in March. Although the January jobs report showed accelerating wages and continued job growth, the Federal Reserve’s expected rate hike in March continues to nudge mortgage rates higher. This, in turn, reduces the purchasing power of the average homebuyer and could be a deterrent to future home sales.
But, if underwriters are beginning to loosen their standards, it could at least partially mitigate some of the effects of the predicted rate hikes.