Despite some declarations that the Federal Open Market Committee’s recent decision to raise the federal funds rate for the first time since June 2006 was a “disaster,” the FOMC’s decision is having a limited impact on mortgage interest rates thus far.
Mortgage rates ticked up a little in he week that ended Dec. 10 in anticipation of a Fed rate hike, with the average interest rate for a 30-year fixed-rate mortgage increasing during that week from 3.93% to 3.95%, according to Freddie Mac’s Primary Mortgage Market Survey.
And in the week that ended Dec. 17, the week that included the FOMC’s decision to raise rates, mortgage rates ticked up slightly again, from 3.95% to 3.97%, but Freddie Mac’s chief economist, Sean Becketti said that interest rates should remain at “historically low levels” throughout 2016, in spite of whatever moves the Federal Reserve is expected to make.
And according to the latest Primary Mortgage Market Survey report from Freddie Mac, interest rates held steady for the second week in a row, with the average interest rate for a 30-year fixed-rate mortgage actually falling slightly in the week that ended Dec. 24, from 3.97% to 3.96%.
A year ago at this time, the 30-year fixed-rate mortgage averaged 3.83%.
"Treasury yields dropped slightly as the holidays approach,” Becketti noted.
“Mortgage rates remain largely unchanged, with the 30-year mortgage rate ticking down a basis point to 3.96%,” Becketti continued. “As we mentioned last week, long-term interest rates will not spike in response to the Federal funds rate increase. While we expect the 30-year mortgage rate to be above 4% in early 2016, we anticipate rates will gradually increase, averaging 4.4% for the year."
Additionally, Freddie Mac’s report showed that the 15-year fixed-rate mortgage averaged 3.22% for the week that ended Dec. 24, unchanged from the week before.
A year ago at this time, the 15-year FRM averaged 3.10%.
Freddie Mac’s report also showed that the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.06% this week, up slightly from 3.03% in the previous week. A year ago, the 5-year ARM averaged 3.01%.
And the 1-year Treasury-indexed ARM averaged 2.68% this week, up from 2.67% in the previous week. At this time last year, the 1-year ARM averaged 2.39%.
