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Mortgage rates move lower

 

Mortgage rates have resembled a boat on the water--bobbing up and down in single- and multi-week swells. 

If you stare too long, watching mortgage rates lately might make you a little queasy given their constant movement. But the interest-rate waves rolled in the right direction last week as products of all stripes saw a decline.  

Mortgage rates declined

According to the latest mortgage rate data:

  • 30-year: The overall average rate for 30-year fixed-rate mortgages (conforming, non-conforming and jumbos) decreased by eight basis points (0.08 percent) to 4.37 percent.
  • 15-year: The overall average rate for 15-year fixed-rate mortgages (conforming, non-conforming and jumbos) managed a fall of only five basis points (0.05 percent) from the prior week's value, dropping to 3.48 percent.
  • FHA: The popular FHA-backed 30-year fixed-rate mortgage is again testing the four percent level, with a four basis point decline setting it at 4.02 percent for the week ending November 22.
  • 5/1 ARM: The overall 5/1 Hybrid ARM closed in on the three percent mark, falling by four hundredths of a percentage point (0.04 percent) to 3.02 percent for the week.

Tapering on the way?

The minutes from the latest Federal Reserve meeting were released last week, revealing that the intention to exit QE remains fully in place. With the question of “when will QE officially end?” still unanswered, it’s easy to wonder how effective the program is and if we really still need it.

At one time, QE produced record-low mortgage rates and certain Treasury yields; however, that is no longer the case, even with the Fed fully in the market and inflation quite low. The Fed might consider tapering QE over the next few weeks, even if the economic thresholds the Fed tied to tapering—job growth, economic expansion, inflation levels--aren’t reached.

This week …

Compared to early in the week last week, mortgage rates firmed up a little though Thursday and Friday, so it's to be expected that we'll see rates moving back up a little this week. That said, mortgage rates still remain incredibly favorable.

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