The decision in September by the Federal Reserve to continue its bond-buying activity at the same rate of $85 billion per month surprised a lot of financial experts and sent mortgage rates plummeting. Last week the downward trend in mortgage rates continued amid a government shutdown that prevented the release of the September employment report and pushed consumer confidence lower.
Mortgage rate slump continues
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan dropped by nine basis points (0.9 percent) to 4.43 percent, the lowest rate since late June. Average rates for 15-year fixed-rate mortgage loans declined by seven basis points (0.07 percent) to 3.56 percent. FHA-insured, 30-year fixed-rate home loans dropped by nine basis points (0.9 percent) to an average rate of 4.04 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), also declined by seven basis points (0.07 percent) to an average rate of 3.20 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Economic news is hard to find
If the government shutdown continues and the October employment report is delayed, compounding the lack of a September employment report, the likelihood diminishes that the Fed will make any major decisions at their October meeting. In addition to the missing labor reports, federal workers applying for unemployment benefits will likely skew reports as long as the government shutdown persists.
Some private sector reports such as the ADP report for September showed 166,000 new jobs, a little below forecasts, but state government reports on weekly unemployment claims show fewer new claims than expected.
The mortgage experts at HSH.com anticipate that mortgage rates will likely move very little this week since few economic reports will be available to push them in one direction or another.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.