Speculation over the Federal Reserve’s bond purchase program is causing mortgage rates to fluctuate week-to-week, dipping lower in Freddie Mac’s latest Primary Mortgage Market Survey compared to the prior week.
The 30-year fixed-rate mortgage averaged 4.51% for the week ending Aug. 29, 2013, down from the previous week’s 4.58%. The rate is still more than a percentage point higher than last year’s 3.59%.
The 15-year fixed-rate mortgage also decreased slightly, averaging 3.54% down from last week’s 3.60%.
Fluctuations in rates have been attributed to “turbulence” stemming from comments by Federal Reserve Chaiman Ben Bernanke regarding plans to taper off the Fed’s bond-buying program, possibly as soon as this year.
“The Fed is monitoring the housing market closely after the run up in mortgage rates over the past few months,” said Frank Nothaft, vice president and chief economist at Freddie Mac, in a statement. “The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week.”
Freddie Mac compiles the Primary Mortgage Market Survey by surveying lenders each week on the rates, fees, and points for the most popular mortgage products.
Written by Alyssa Gerace