Investors, economists and housing market experts have been analyzing the potential action of the Federal Reserve, wondering when the Fed will begin to wind down the QE3 policy of buying bonds and mortgage-backed securities. Uncertainty about the Fed's actions and the rocky economic recovery has caused mortgage rates to rise in recent weeks, but last week mortgage rates barely moved.
Mortgage rates make minuscule moves
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose very slightly by 1 basis point (0.01 percent) to 4.76 percent. Average rates for 15-year fixed-rate mortgage loans also rose by 1 basis point (0.01 percent) to 3.83 percent. FHA-insured, 30-year fixed-rate home loan rates rose higher by 6 basis points (0.06 percent) to an average rate of 4.42 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), increased by two basis points (0.02 percent) to an average rate of 3.47 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Economy seems sluggish
The economists at HSH.com anticipate that the Fed will announce a slow tapering of their bond-buying activity and then monitor the reaction of the market. If that's the case, the HSH.com analysts don't expect an immediate change in mortgage rates.
Economic news last week continued the pattern of slow growth, with consumer spending slowing for the past two months and new claims for unemployment continuing to run about 320,000 to 335,000 per week.
The mortgage experts at HSH.com anticipate that mortgage rates will stay close to the same level this week depending on the news from the Fed and other economic data for the week such as housing starts, housing permits, and existing home sales.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.