Mortgage rates are on the rise even though the Federal Reserve lowered interest rates once again recently…

by Mac Slavo of SHTFplan

Mortgage rates are on the rise even though the Federal Reserve lowered interest rates once again recently. The 30-year fixed-rate mortgage averaged 3.78% during the week ending October 31. That’s up three basis points from the previous week.

It’s the first time since April that rates have risen in three consecutive weeks, according to data from Freddie Mac. If borrowers are looking for relief from their mortgage because of low rates, it doesn’t look like they will get it. However, even though the mortgage rate has increased, the rate on the 30-year mortgage remains over a full percentage point lower than at this same time a year ago.

According to Market Watch, the 15-year fixed-rate mortgage increased one basis point to an average of 3.19%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.43%, up three basis points from a week ago.

Other factors are influencing the mortgage rates too. Overall, spending and Americans’ obsession with consumption has remained strong recently, which, in turn, is a reflection of at least a somewhat healthy job market.   “Purchase activity continues to show strength, indicating obvious home-buyer demand,” Sam Khater, Freddie Mac’s chief economist, said in the report. “However, the lack of housing supply remains a major barrier to not just the housing market, but the overall economic recovery.”

But consumer confidence and consumer spending have not “matched up” lately.  The numbers we are given from the government appear contradictory and do not get better once the surface is scratched.

Odd Economic Numbers: Consumer Confidence Falls, But Consumer Spending Remains High

Lack of housing, as Khater said, is another reason why rates may continue to go higher.  It’s the simple economic law of supply and demand. When fewer homes are available, the prices will go up.  If suddenly everyone is selling, the prices will have to come down in order to compete and make a sale. This will have an effect on the mortgage rates as well.

It could be some time before borrowers feel any relief in the housing sector when it comes to borrowing.