Mortgage Rates Get Cheaper, for Now

Freddie Mac released its weekly update on national mortgage rates on Thursday morning, and after last week's sharp bounce up, today we're seeing rates ease right back down again -- nearly across the board.

Both 30-year fixed-rate mortgages (FRMs) and 15-year FRMs dropped over the past week, with 30-year FRMs shedding five basis points to fall to 4.32%, while 15-year FRMs gave back all of last week's six-basis-point gain to return to the 3.32% level of two weeks ago.

5/1 adjustable-rate mortgage (ARM) rates reacted even more abruptly, returning to levels last in 2013 as they fell seven basis points to 3.02%. Only 1-year ARMs got more expensive, blipping up a single b.p. to reach 2.49%.

A year ago, 30-year fixed-rate mortgages averaged 3.54% and 15-year FRMs averaged 2.72%. A year ago, 5/1 ARMs averaged 2.61% while 1-year ARMs averaged 2.63%.

Freddie Mac vice president and chief economist Frank Nothaft  pointed to a modest decline in housing starts as one explanation for the weakness in rates -- but also warned homebuyers that with interest rates on 10-year U.S. Treasuries rising following Wednesday's Fed announcement, we could see mortgage rates move higher in tandem.

In short -- if mortgages got a bit cheaper last week, they could get a bit more expensive over the week to come.


 

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