So far in 2014, 30-year mortgage rates have stayed within a narrow range of 30 basis points. This is a far cry from last year, when those rates varied by a total of 124 basis points from high to low. Will current mortgage rates stay frozen in place or thaw with the spring weather and start to move? If so, in what direction?

Would-be home buyers may base their decisions on the answers to those questions, and homeowners have plenty at stake as well. Anyone looking to sell a house benefits if mortgage rates stay low enough to encourage buyers. Homeowners staying in their homes benefit if low mortgage rates make home equity loans and refinancing cheaper.

So, with all that riding on mortgage rates, here are four key things to ponder.

1. The recent trend
Thirty-year mortgage rates have remained within a range between 4.23 percent and 4.53 percent so far in 2014. Actually, mortgage rates have been in a similar range since mid-November, so there really is no prevailing trend.

This is helpful for borrowers, as it is easier than trying to catch fast-moving rates. It gives borrowers a little time to decide what loan terms suit them best under current conditions, but they have to be mindful of what factors might change interest rates next.

2. The spread
Last year, the spread between 30-year and 15-year mortgage rates widened from 70 to 96 basis points. This spread has stayed around the latter mark so far in 2014.

What that means is that 15-year mortgage rates did not rise as much as 30-year mortgage rates last year, so for people who can afford the higher payments that come with a shorter mortgage, a 15-year loan might be an especially attractive option. The relatively low level of 15-year mortgage rates might also create refinancing options for some current home owners.

3. The Fed's impact
Speculation about the Fed cutting back on its stimulus program was one of the factors that drove mortgages up last year. Now that the Fed has started easing back on monetary stimulus, evidence has mounted that the economy is losing steam. The big question now is whether this weakness is all weather-related, or if the economy will stay cool even once the weather warms up.

If the Fed is forced to prolong its stimulus program, mortgage rates could stay in their current range for a while longer.

4. The threat of inflation
Keep an eye on inflation, especially since oil prices rose sharply in February. If inflation starts to climb, expect mortgage rates to follow.

Above all, it should be remembered that current mortgage rates represent a bargain compared to the historical level of mortgage rates, and that 15-year rates look especially attractive. It is best to act decisively when such bargains are available, because changes in interest rates can be as unpredictable as changes in the weather.

The original article: Will mortgage rates thaw this spring? appeared on

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