Freddie Mac released its weekly update on national mortgage rates Thursday morning, and rates were up, but not much, in the survey that included the days leading up to the Fed's announcement that it would begin tapering its bond buying.
Freddie Mac spokeswoman Ruth Fisher said this afternoon that most of the data that went into today's update had been collected prior to the Federal Reserve's announcing its decision Wednesday to begin tapering its bond buying program. Consequently, that announcement had little effect on the rates reported in this week's update.
Thirty-year fixed-rate mortgages (FRMs) gained just five basis points over the past week, rising to 4.47%. Shorter-term 15-year FRMs experienced a sharper, eight-basis point rise to 3.51%. This returns them to the levels of mid-September.
A similar dynamic was at play for adjustable-rate mortgages (ARMs). Longer-term 5/1 ARMs gained two basis points, while shorter one-year ARMs rose six b.p., putting them at 2.96% and 2.57%, respectively.
Freddie Mac Vice President and Chief Economist Frank Nothaft pointed out that at this point in time, the central bank intends to only "trim" its bond buying program -- not end it entirely. Thus, the taper's effect on mortgage interest rates may be limited. Nothaft also noted that "the economy expanded at a modest pace, but the unemployment rate remains elevated." Those are conflicting trends which suggest the Fed may continue to steer a middle course, and taper its bond-buying only gradually.