While the Federal Reserve's decision to put off a slowdown of their bond-buying policy indicates that Fed Board members see the U.S. economy's recovery as still tepid, that decision worked to push mortgage rates back to the lowest interest rates in the past two months.
Mortgage rates drop dramatically
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan declined by 13 basis points (0.13 percent) to 4.52 percent, the lowest rate since June 2013. Average rates for 15-year fixed-rate mortgage loans eased by 11 basis points (0.11 percent) to 3.63 percent. FHA-insured, 30-year fixed-rate home loan rates dropped by 14 basis points (0.14 percent) to an average rate of 4.13 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) fell by 11 basis points (0.11 percent) to 3.27 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Economic news signals a slump
The Federal Reserve's decision to delay their often talked-about but yet-to-be-seen reduction in bond-buying was based on a variety of factors such as continued unemployment and slower than anticipated growth as well as concern over the impact of higher mortgage rates on economic recovery in the housing market. New home sales were up in August compared to July but the annualized rate of sale was the second slowest month of 2013.
Economic news seems to continue to be a push-pull, getting marginally better then pulling back again.
This week, economists are waiting on the September jobs report due out this Friday and the fallout from debate in Congress and the potential government shutdown.
The mortgage experts at HSH.com anticipate that rates are likely to fall a little more this week or stay level, unless of course an economic report comes out that shows stronger-than-expected economic growth.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.