Long-term mortgage rates were up only slightly this week as markets awaited the Federal Reserve’s interest-rate decision Tuesday, Freddie Mac and Bankrate.com reported today.
In Freddie Mac’s survey, the rate on 30-year fixed-rate mortgages rose to an average 6.34 percent from last week’s 6.31 percent, and the 15-year fixed rate nudged higher to 5.98 percent from 5.97 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.5 on the 30- and 15-year loans.
Adjustable-rate mortgages (ARMs) were mixed this week, as the five-year Treasury-indexed hybrid ARM was up at an average 6.21 percent from 6.17 percent a week ago, while the rate on one-year Treasury-indexed ARMs sank to 5.65 percent from 5.66 percent. Points on the five-year and one-year loans averaged 0.5 and 0.6, respectively.
“Mortgage rates were largely unchanged in the previous week, with long-term rates lingering at lower levels not seen since May,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “The recent retreat in mortgage rates has brought in an increased volume of mortgage applications, according to the Mortgage Bankers Association, and pushed the share of applications for refinancing to the highest rate since April.”
In Bankrate.com’s survey, fixed mortgage rates were slightly higher this week, with the average conforming 30-year fixed mortgage rate rising to 6.32 percent, and discount and origination points averaging 0.34.
The average 15-year fixed-rate mortgage, popular for refinancing, increased to 6 percent, Bankrate.com reported. The average jumbo 30-year fixed rate nosed higher to 7.23 percent. Adjustable mortgage rates moved higher in a more pronounced fashion, with the average one-year ARM stepping up to 6.24 percent and the average 5/1 ARM jumping to 6.41 percent.
Any effect that the Fed’s recent 0.5 percent cut in the federal funds rate will have on mortgage rates is still unclear, Bankrate.com reported. If the Fed’s aggressive move indicates an economy that is considerably weaker than originally thought, mortgage rates could move lower. But such an aggressive move by the Fed can open the door to renewed inflation worries in the coming months. If inflation concerns begin to percolate, mortgage rates would move higher. The Fed remains coy about plans for the next meeting Oct. 30-31.
Fixed mortgage rates remain the most attractive option for borrowers looking to buy or refinance, according to Bankrate.com. Just two months ago, the average 30-year fixed mortgage rate was 6.82 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,307. Now that the average conforming 30-year fixed rate is 6.32 percent, the same $200,000 loan carries a monthly payment of $1,241.
The following is a sampling of Bankrate.com’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:
New York – 6.31 percent with 0.19 point
Los Angeles – 6.45 percent with 0.59 point
Chicago – 6.31 percent with 0.17 point
San Francisco – 6.32 percent with 0.6 point
Philadelphia – 6.37 percent with 0.16 point
Detroit – 6.29 percent with 0.01 point
Boston – 6.4 percent with 0.03 point
Houston – 6.26 percent with 0.63 point
Dallas – 6.24 percent with 0.48 point
Washington, D.C. – 6.24 percent with 0.56 point