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If mortgage rates are a two year old kid, their temper tantrum is over for now. After a month of ups and downs, mortgage rates have stayed relatively consistent for the second week in a row. Most rates inched up ever so slightly, but 30-year fixed rates didn’t budge at all. Consider this the nap time after the time out mortgage rates were put in. They were fluctuating up and down so rapidly for weeks, baby sitter Freddie Mac had to do something to get them to calm down. Perhaps a wild kid is a good comparison to mortgage rates: they can be unpredictable, they affect your day-to-day life and when they’re calm, we’re all happy. For the raw numbers on how mortgage rates changed, here’s the word straight from Freddie Mac:
30-year fixed-rate mortgage (FRM) averaged 4.40% with an average 0.7 point for the week ending August 15, 2013, unchanged from last week. Last year at this time, the 30-year FRM averaged 3.62%.
15-year FRM this week averaged 3.44% with an average 0.6 point, up from last week when it averaged 3.43%. A year ago at this time, the 15-year FRM averaged 2.88%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.23% this week with an average 0.5 point, up from last week when it averaged 3.19%. A year ago, the 5-year ARM averaged 2.76%.
1-year Treasury-indexed ARM averaged 2.67% this week with an average 0.4 point, up from last week when it averaged 2.62%. At this time last year, the 1-year ARM averaged 2.69%.
At the end of the day we all love our kin. We can be angry at them for changing so quickly, or resent new trends they embrace but that shouldn’t change the way we feel about them. On second thought, this metaphor is flawed; no one should love mortgage rates like children. That’s weird. Regardless, here’s the Vice President and Chief Economist of Freddie Mac, Frank Nothaft, to sing the sweet lullaby that is how and why mortgage rates changed this week.
“Fixed mortgage rates have been bouncing around over the past few weeks on market speculation that the Fed will taper some of its monetary stimulus. In fact, 65% of economists surveyed by Bloomberg expect the Fed to reduce the amount of bond purchases at its September 17tand 18 monetary policy committee meetings. Currently, mortgage rates on 30-year fixed mortgages are 1.1 percentage points above their all-time low set on November 21, 2012, which translates into $125 more per month in mortgage payments on a $200,000 loan.”
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