Mortgage rates lower before week’s end
Mortgage rates eased again last week, trimming a little more off the top of the more than one percentage point rise in rates seen between May and mid-July.
While any decline is of course welcomed by potential homebuyers and refinancing homeowners, these dips in mortgage rates show no sign of being durable.
Act early to grab a low mortgage rate this week
With this being the case, these are chances for those actively in the market to grab a lower mortgage rate.
While the rise in mortgage rates recently has predictably hurt refinancing activity, the effects are not nearly as pronounced in the home buying market, but there are and will be effects from both the rise in mortgage rates and the firming of home prices this spring and summer.
Although it will be a couple of months yet before the full effect is revealed, we are seeing a couple of inklings already.
Mortgage rates fell last week
- 30-year fixed-rate mortgages fell by five basis points (0.05 percent) to 4.55 percent, the lowest rate in three weeks
- 15-year fixed-rate mortgages dropped by four basis points (0.04 percent), landing at 3.64 percent for the week
- FHA-backed 30-year fixed-rate mortgages also declined by four basis points, falling back to 4.18 percent
- 5/1 Hybrid ARMs fell by two one-hundredths of a percentage point (0.02 percent) to land at an average 3.33 percent
Fed has had ‘dramatic effects on mortgage rates’
The Federal Reserve meets again this week. There have been fairly dramatic effects on mortgage rates after the close of the last two meetings in May and June, but Fed Chairman Bernanke and many others have since taken pains to try to enlighten the market about the timing of the beginning of the end of the Fed's extraordinary programs of purchasing MBS and Treasuries.
Although the Fed will again try to keep the markets from responding in an unruly and unwanted way, there is no way to know how they will react, especially with an impending -- and key -- employment report due on Friday.
Exaggerated changes in mortgage rates ahead?
Mortgage rates dipped a little last week, but all suggestions are at the moment that a firming of rates is to be expected this week.
A Fed meeting and an employment report would normally suggest a volatile week ahead, but markets have just recently settled after weeks of upheaval, so we may get more exaggerated changes in rates.
Best to figure on at least some increase in mortgage rates this week--probably taking back last week's decline and perhaps a little more--so act now.