Nation & World

Mortgage rates creep up but 'bigger moves are on the horizon'

The Gazette
The Gazette

After holding steady for nearly a month while awaiting a resolution to the federal government shutdown, fixed mortgage rates cautiously crept up this week.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average inched up to 4.46 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.)

The rate was 4.45 percent a week ago and 4.22 percent a year ago.

The 15-year fixed-rate average ticked up to 3.89 percent, with an average 0.4 point. It was 3.88 percent a week ago and 3.68 percent a year ago.

The five-year adjustable-rate average jumped to 3.96 percent with an average 0.3 point. It was 3.90 percent a week ago and 3.53 percent a year ago.

“Rates jumped around somewhat over the past week, dipping after soft housing and consumer confidence data, and climbing after a strong private payrolls report,” said Aaron Terrazas, a senior economist at Zillow.

“But bigger moves are on the horizon. As often occurs when (Federal Reserve) statements catch markets off guard, bond yields fell after the (Fed) announced its inclination to pause future rate hikes.

“Mortgage rates seem certain to follow in step. The next major data event on the horizon is Friday’s jobs report and, after weeks of relative calm, markets are poised for increased volatility.”

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As expected, the Federal Reserve did not raise its benchmark rate at its meeting this week. The central bank signaled that it is in no rush to do so.

That was enough to cause the stock market to surge and long-term bond yields to slip, but too late in the week to be factored into Freddie Mac’s survey.

The government-supported mortgage backer aggregates rates weekly from 125 lenders nationwide to come up with national average mortgage rates.

“On the heels of relatively weak December home contract signings, mortgage rates held relatively steady this week, which is good news for buyers currently in the market,” said Danielle Hale, chief economist for Realtor.com.

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