Freddie Mac: Mortgage Rates Up Slightly But Expected To Stay Flat

Fixed mortgage rates edged up just slightly during the week ended Oct. 15, according to Freddie Mac's Primary Mortgage Market Survey.

However, rates are expected to remain flat, in the near term, as the Federal Reserve has indicated that it probably will not raise short-term interest rates anytime soon.

That factor, coupled with weaker than expected consumer demand, pushed Treasury yields lower suggesting interest rates may remain low for a while longer, Freddie Mac says in a release.

The average rate for a 30-year fixed-rate mortgage (FRM) was 3.82%, up from 3.76% the previous week. A year ago at this time, the 30-year FRM averaged 3.97%.

The average rate for a 15-year FRM was 3.03%, up from 2.99%. A year ago at this time, the 15-year FRM averaged 3.18%.

The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.88% this week, unchanged from the previous week. A year ago, the five-year ARM averaged 2.92%.

The average rate for a one-year Treasury-indexed ARM was 2.54%, down from 2.55% the previous week. At this time last year, the one-year ARM averaged 2.38%.

‘As the shock of the weak September employment report wore off, Treasury rates drifted higher,’ says Sean Becketti, chief economist for Freddie Mac. ‘In response, the 30-year mortgage rate climbed 6 basis points to 3.82 percent, marking 12 consecutive weeks below 4 percent.’

‘Late-breaking news suggests mortgage rates may remain in this territory a while longer,’ Becketti adds. ‘After this week's survey closed, Federal Reserve Governor Daniel Tarullo was quoted suggesting the Fed may not act this year, and Wednesday the 10-year Treasury closed under two percent in reaction to economic releases indicating weak consumer demand.’


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