Nearly a month after the Federal Reserve raised benchmark interest rates by 25 basis points, mortgage rates have remained stubbornly low, with 30-year fixed-rate mortgages dipping to 3.95 percent, according to Freddie Mac in its first Mortgage Market Survey of the new year.

The slight 4 basis-point dip, from 3.99 percent to 3.95 percent for the week ending Jan. 4, mirrors a similar downward tick for 15-year fixed-rate mortgages, which slid 6 basis points, from 3.44 percent to 3.38 percent during the same period, according to the new survey.

Lower yields on 10-year and 30-year Treasury notes earlier this week helped drive the mortgage rates down, according to Freddie Mac Deputy Chief Economist Len Kiefer.

“Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year,” said Kiefer, adding that 30-year fixed-rate mortgages fell a quarter of a percent point year-over-year. “Despite increases in short-term interest rates, long-term interest rates remain subdued.”

Sticking to a script economists had long anticipated, Federal Chairwoman Janet Yellen announced a modest benchmark interest rate hike of between 1.25 percent and 1.50 percent on Dec. 13, 2017, a move widely perceived as a reflection of confidence in the U.S. economy. 

The 25 basis point hike, announced at the conclusion of the Central Bank’s two-day Open Market Committee meeting, was supported by all but two members of its Board of Governors, who called for rates to stay unchanged. It marked the third and final hike of 2017.

Of the Fed announcement, Kiefer predicted only gradual increases over the next several months.

“With the [Federal Open Market Committee] FOMC minutes showing continued support for gradual increases in policy rates from many participants and inflation rates remaining low, there isn’t much upward pressure on long- term rates at the moment,” said Kiefer, in a prepared statement. “Whether that changes due to a tighter labor market and the economic impact of tax reform remains to be seen.”

After the Fed hike in December, National Association of Realtors Chief Economist Lawrence Yun predicted a modest mortgage rate hike to follow early in the new year that would, eventually, escalate by as much as 25 basis points over the course of several adjustments.

“The longer-term interest rates, like the 30-year fixed mortgages rate, will therefore be nudged higher in 2018,” Yun said in December. “Economic stimulus will help with job creation and housing demand, but higher interest rates threaten to cut into housing affordability in 2018.”

Email Jotham Sederstrom

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription