The press conference following the Federal Reserve's policy meeting during the week of June 17 lit a fuse under investors who proceeded to sell off Treasury bills at a fast pace, driving up yields and in turn pushing up mortgage rates to their highest levels since August 2011.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 4 basis points (0.4 percent) to 4.19 percent. Average rates for 15-year fixed-rate mortgage loans rose by just 2 basis points (0.2 percent) to 3.35 percent. FHA-insured, 30-year fixed-rate home loan rates rose by four basis points (0.03 percent) to an average rate of 3.81 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) rose 6 basis points (0.06 percent) to 2.91 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Although Fed Chairman Ben Bernanke didn't specify a particular date, he did say he believes the Fed will begin to "moderate the pace" of asset purchases later this year, followed by a continued measured reduction during the first half of 2014 and a complete phase-out around the middle of 2014. Of course, this depends on unemployment dropping to 7 percent and a solid pace of economic growth.
Given the fact that average mortgage rates for a 30-year fixed-rate loan jumped to 4.33 percent on Friday June 21, the mortgage experts at HSH.com expect another rise in rates this week. Economic news this week such as an update of GDP, new home sales in May and a report from the Chicago Federal Reserve region are anticipated to continue the trend toward higher mortgage rates.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.