The average 30-year mortgage rate rose by 1 basis point to 3.99% on Wednesday, which equates to a $476.84 monthly payment per $100,000 borrowed. (A basis point equals one hundredth of a percentage point). A month ago, the equivalent payment was higher by $2.31.
The average 15-year mortgage rate was unchanged at 3.15%, equating to a $697.82 monthly payment per $100,000 borrowed. A month ago, the equivalent payment was higher by $1.45.
|
Rate (National Average) |
Today |
1 Month Ago |
|---|---|---|
|
30-year fixed jumbo |
4.24% |
4.41% |
|
30-year fixed |
3.99% |
4.03% |
|
15-year fixed |
3.15% |
3.18% |
|
30-year fixed refi |
4.01% |
4.07% |
|
15-year fixed refi |
3.20% |
3.19% |
|
5/1 ARM |
3.13% |
3.29% |
|
5/1 ARM refi |
3.24% |
3.50% |
5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED five-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.
Image source: Getty Images.
Mortgage rates little changed, even as the market warms to the possibility of a March rate hike
In a note published on Tuesday, Morgan Stanley predicted that the Federal Reserve would next raise interest rates in September, but that note now looks like a dove lost among the market's cast of hawks following Federal Reserve Chair Janet Yellen's appearance before the Senate Banking Committee on Wednesday.
Indeed, the probability of a March rate hike was reflected in federal funds futures prices, which rose to 44% today, from 34% yesterday. Presumably, that increase is the product of off-the-cuff comments from Yellen in response to senators' questions, as the same prepared remarks were submitted to the House's Committee on Financial Services yesterday. These are the key passages regarding interest rates (italics denote my emphasis):
As I noted on previous occasions, waiting too long to remove accommodation would be unwise, potentially requiring the [Federal Open Market Committee] to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession.
This is a general statement, but it suggests that policymakers are mindful that the balance of risks has shifted such that the risk of waiting too long to raise now supersedes the risk of acting precipitously and choking off the recovery.
Incoming data suggest that labor market conditions continue to strengthen and inflation is moving up to 2 percent, consistent with the Committee's expectations. At our upcoming meetings, the Committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.
In other words, based on the current expected trajectory for the economy, a rate rise would be appropriate at "upcoming meetings":
The committee's view that gradual increases in the federal funds rate will likely be appropriate reflects the expectation that the neutral federal funds rate -- that is, the interest rate that is neither expansionary nor contractionary and that keeps the economy operating on an even keel -- will rise somewhat over time.
Translation: As the economy continues to shake off the post-crisis doldrums, the level that is desirable for the federal funds rate will continue to rise.
