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Mortgage rates have moved in an unexpected way again this week. Rising just slightly to the levels they were almost two weeks ago, mortgage rates bumped up slightly despite a Federal Reserve press release stating that they will continue to buy mortgage bonds. This will keep mortgage rates low, and encourage people to commit to home ownership or refinancing. This makes much more sense than the theories that other, less reliable news sources had. Witchcraft Weekly said the Fed’s bond purchases were “…the last ingredient in a mighty strong witch’s brew,” while Crazy Yelling Guy Quarterly stated “WHY DOES THE FED NEED SO MANY BONDS!?! WHY!?” Silence Magazine had no comment. Trust credible news sources for your mortgage news in the future, like these raw numbers from Freddie Mac’s Primary Mortgage Market Survey.
30-year fixed-rate mortgage (FRM) averaged 4.39% with an average 0.7 point for the week ending August 1, 2013, up from last week when it averaged 4.31%. Last year at this time, the 30-year FRM averaged 3.55%.
15-year FRM this week averaged 3.43% with an average 0.7 point, up from last week when it averaged 3.39%. A year ago at this time, the 15-year FRM averaged 2.83%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18% this week with an average 0.6 point, up from last week when it averaged 3.16%. A year ago, the 5-year ARM averaged 2.75%.
1-year Treasury-indexed ARM averaged 2.64% this week with an average 0.4 point, down from last week when it averaged 2.65%. At this time last year, the 1-year ARM averaged 2.70%.
So as you can see, rates have jumped a bit but it’s nothing to stress too much about. They’re still near the historic lows they were at months ago, and they still make for an incredibly affordable home loan. Just like Monster Truck Enthusiast reported on the Fed’s announcement, “The Fed has no realistic effect on monster trucks, but it seems like a fantastic time to get a home loan or refi.” We couldn’t agree with them more. For the how and why of this week’s rate adjustments, here’s Frank Nothaft of Freddie Mac.
“Mortgage rates rose slightly leading up to the Federal Reserve’s (Fed) monetary policy statement this week. The statement indicated no change in monetary policy. The Fed indicated that the economy expanded at a modest pace, but the unemployment rate remains elevated.
“With mortgage rates still relatively low, the housing recovery continues to support the overall economy. May’s S&P/Case Shiller® 20-city composite index was up 12.2% from last May and represented the largest annual increase since March 2006. In addition, pending home sales in June hovered near a six-and-a-half year high. Finally, second-quarter GDP growth came in at 1.7% with residential fixed investment contributing 0.4%. This makes it the 11th consecutive quarter housing has made a positive contribution to real GDP growth.”
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