June’s Federal Open Market Committee (FOMC) meeting is next Wednesday. The Fed is widely expected to raise policy rates by 0.250% at this meeting. Mortgage rates have already factored in a Fed rate increase. However, rates are creeping up after geopolitical tensions in Italy have dissipated. The European Central Bank also meets next week. If the ECB announces plans to reduce stimulus, rates could be pressured slightly higher.
Volatility in mortgage rates from geopolitical tensions helped push rates lower last week. Mortgage purchase applications rose 4.1% week-over-week. Freddie Mac reports that 46% of first-quarter purchase mortgages were to first-time buyers. This marks the largest share recorded, dating back to 2012. Homes in lower price ranges are appreciating faster than more expensive homes. Prices rose 9.3% year-over-year for homes priced 75% or less of the median.
Graham C. Wong | Vice President – Mortgage Lending | Mortgage Capital Partners |