Mortgage rates this week eased from their four-week ascent, as inflation became less of a concern to investors, according to surveys conducted by Freddie Mac and Bankrate.com.
In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 6.26 percent for the week ended today, down from last week’s average of 6.28 percent. The average for the 15-year fixed-rate mortgage is 5.89 percent, down from last week’s average of 5.91 percent. Points on both the 30- and 15-year averaged 0.6.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.96 percent this week, with an average 0.6 point, up slightly from last week when it averaged 5.95 percent. The one-year Treasury-indexed ARM averaged 5.32 percent, with an average 0.7 point, down from last week when it averaged 5.36 percent.
“Tame core inflation figures and market confidence that the Fed will continue to keep inflation low kept mortgage rates in check this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Over the long term, we expect mortgage rates will bounce back and forth a bit, remaining near current levels.
“Based on applications for home purchases in November and December, we also expect that home sales will slow to a more traditional pace in January and February.”
In Bankrate.com’s survey, fixed mortgage rates fell as investors put on the inflation blinders, but adjustable mortgage rates climbed in anticipation of additional Fed interest-rate hikes. The average 30-year fixed-rate mortgage dipped from 6.37 percent to 6.34 percent, Bankrate.com reported. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.3 discount and origination points.
Bankrate.com reported that the average 15-year fixed mortgage rate retreated by a similar amount, from 6.02 percent to 5.99 percent, and the average jumbo 30-year fixed rate dropped to 6.53 percent from 6.58 percent last week. Adjustable-rate mortgages increased, with the average 5/1 ARM rising from 6.05 percent to 6.08 percent, and the average one-year ARM moving from 5.69 percent to 5.73 percent.
A stronger economic outlook and continued inflation worries were lost on — or just ignored by — investors as bond yields and fixed mortgages dipped this week, according to Bankrate.com. Fixed mortgage rates are closely related to yields on long-term government securities. But, adjustable rates climbed as short-term interest-rate benchmarks plod higher. The result is the narrowest spread between fixed and adjustable mortgage rates in nearly five years.
Although fixed mortgage rates are higher than one year ago, the increase pales compared to the increases in interest rates and monthly payments facing adjustable-rate-mortgage borrowers. Fixed mortgage rates currently represent an attractive refinancing alternative for adjustable rate borrowers, Bankrate.com said.
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