A potential Brexit deal as well as progress in the trade talks with China caused a sharp rise in mortgage rates this week, continuing a volatile period for home loan rates.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.69% with an average 0.6 point. (Points are fees paid to a lender equal to 1% of the loan amount and are in addition to the interest rate.) It was 3.57% a week ago and 4.85% a year ago. The 30-year fixed rate has bounced around the last six weeks, swinging from a low of 3.49% on Sept. 5 to a high of 3.73% two weeks later. It started this month at 3.65%, dropped to 3.57% last week and then rebounded to 3.69% this week.

The 15-year fixed-rate average jumped to 3.15% with an average 0.5 point. It was 3.05% a week ago and 4.26% a year ago. The five-year adjustable rate average held steady at 3.35% with an average 0.4 point, the same as it was a week ago. It was 4.1% a year ago.

“Mortgage rates rose this week, riding positive, albeit tentative, developments in Brexit and the U.S.-China trade conflict,” said Matthew Speakman, a Zillow economist. “It’s a pivotal moment in these two major geopolitical stories, so it’s likely that more volatility for mortgage rates is on the horizon.”

Speakman noted that geopolitics and trade-related uncertainty have done more to affect mortgage rates lately than disappointing economic news.

“Bond yields barely budged on Wednesday despite U.S. retail sales figures falling for the first time in seven months,” Speakman said.


The yield on the 10-year Treasury rose to 1.77% on Tuesday as investors encouraged by a possible Brexit deal shed bonds and moved back to equities. The 10-year yield had risen 12 basis points – a basis point is 0.01 percentage point – before retreating slightly on Wednesday. Mortgage rates tend to follow the same path as long-term bonds. When yields go up, interest rates tend to also go up.

Bankrate.com, which puts out a weekly mortgage rate trend index, found experts evenly divided on where rates are headed in the coming week. A third say they will rise; another third say they will fall and the remaining third say they will remain the same. Dick Lepre, senior loan officer at RPM Mortgage in San Francisco, is one who predicts rates will hold steady next week.

“There is no consensus where things are going,” Lepre said. “Fed policy is changing, tariffs seem to change at least twice a week, and some people are forecasting recession. Despite near-term uncertainty, the fact is that the U.S. economy continues to be healthier than most of the rest of the world and, as time goes on, flight-to-quality buying should lower Treasury yields and mortgage rates – just not this coming week.”

Meanwhile, mortgage applications leveled out last week. According to the latest data from the Mortgage Bankers Association, the market composite index – a measure of total loan application volume – increased 0.5% from a week earlier. The refinance index went up 4%, while the purchase index went down 4%.

The refinance share of mortgage activity accounted for 62.2% of all applications.

“Mortgage applications last week were essentially flat – up just 0.5% – as an increase in refinances offset a decrease in purchase applications for the second week in a row,” said Bob Broeksmit, MBA president and CEO. “Lenders in many markets continue to report that low mortgage rates have led to increased interest from prospective buyers, which is why purchase activity was still a solid 12% higher than a year ago.”