Thirty-year fixed rate mortgages (FRM) edged down five basis points this week, falling to 3.93%, while 15-year FRMs showed a steeper six-basis-point drop to 3.04%. Among variable-rate products, 5/1 adjustable-rate mortgages held steady at 2.79%, while one-year ARMs slipped one basis point to 2.57%.
Commenting on today's news, Freddie Mac Chief Economist Frank Nothaft said market participants were cautious this week while awaiting the Federal Reserve's updated monetary policy announcement. "The Fed stated that economic growth has been expanding at a moderate pace and that labor market conditions have shown further improvement, although the unemployment rate remains elevated," Nothaft is quoted as saying. In conjunction with low inflation levels, Nothaft noted this all adds up to "the Fed will continue its bond-buying program at the current pace and maintain its highly accommodative monetary policy stance."
This in turn suggests interest rates will remain low, and appears to have curbed the spike in mortgage rates rising on fears of worse news.