Long-term mortgage rates fell slightly this week in anticipation of the Federal Reserve’s upcoming meeting, according to surveys conducted by mortgage buyer Freddie Mac and Bankrate.
In Freddie Mac’s weekly survey, the 30-year fixed-rate mortgage averaged 6.25 percent for the week ended today, down from last week when it averaged 6.32 percent.
The average for the 15-year fixed-rate mortgage this week is 5.64 percent, also down from last week when it averaged 5.7 percent. Points on both the 30- and 15 year averaged 0.6.
One-year Treasury-indexed adjustable-rate mortgages averaged 4.13 percent this week, with an average 0.7 point, unchanged from last week.
“This week’s easing off in mortgage rates is rooted in the market’s wait-and-see posture with regard to the Federal Reserve Board’s upcoming actions on interest rates this year starting with their meeting at the end of June,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Mortgage rates have been remarkably stable and affordable, and borrowers responded enthusiastically in May by pushing up new-home sales nearly 15 percent – the biggest one-month gain in more than 11 years.
“Our current economic forecast sees 30-year mortgage rates staying in their current and attractive range of 6 to 7 percent for the rest of the year.”
Fixed mortgage rates broke out of a six-week funk, barely, with rates dropping below the narrow range occupied since mid-May. The average 30-year fixed-rate mortgage dipped from 6.35 percent to 6.3 percent, according to Bankrate.com’s weekly national survey of large lenders.
Fixed mortgage rates remain largely unchanged over the past seven weeks, falling between 6.3 percent and 6.37 percent each week since May 12. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.38 discount and origination points.
The 15-year fixed-rate mortgage popular for refinancing fell from 5.75 percent to 5.72 percent, and the jumbo 30-year fixed-rate mortgage dropped by a similar amount to 6.5 percent. The average one-year adjustable-rate mortgage declined for the first time in three weeks, falling 1 basis point lower to 4.36 percent. A basis point is one one-hundredth of one percentage point.
Mortgage rates showed little movement this week ahead of the much-anticipated Federal Open Market Committee meeting June 29-30. An interest rate hike of one-quarter of a percentage point is expected, and those expectations have been essentially unchanged for weeks. The widespread consensus of a quarter-point move, and little to alter that thinking, has kept yields on long-term Treasury notes in a narrow range in the past week. Mortgage rates are closely related to the yields on government bonds.
“Mortgage rates have been jogging in place for more than a month as long-term Treasury yields have been range-bound,” said Bankrate senior financial analyst Greg McBride. “But the inflation monster still lurks and is likely to exert upward pressure on rates in July.”
The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.
New York – 6.34 percent with 0.18 point
Los Angeles – 6.32 percent with 0.56 point
Chicago – 6.36 percent with 0.11 point
San Francisco – 6.32 percent with 0.35 point
Philadelphia – 6.32 percent with 0.33 point
Detroit – 6.23 percent with 0.31 point
Boston – 6.35 percent with 0.1 point
Houston – 6.23 percent with 0.72 point
Dallas – 6.27 percent with 0.49 point
Washington, D.C. – 6.24 percent with 0.64 point
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